Name of law Law amending and supplementing the law on independent financial audit of the Name Bill a bill amending and supplementing the law on independent financial audit of acceptance Date 01/07/2010 number/year Official Gazette 39/2010 Decree No 183

Pursuant to article 98, paragraph 4 of the Constitution of the Republic of Bulgaria

I DECLARE:

To be published in the Official Gazette the law amending and supplementing the law on independent financial audits, HLI passed by National Assembly on July 1, 2010.

Issued in Sofia on July 7, 2010.

The President of the Republic: Georgi Parvanov

Stamped with the State seal.

Minister of Justice: Margarita Popova

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amending and supplementing the law on independent financial audit (official SG. 101 since 2001; amended by 91/2002, no. 96 of 2004 and 77/105 by 2005, issue 30, 33, 62 and 105 2006 67/2008 and no. 95 of 2009.)

§ 1. In art. 9 the following amendments and supplements shall be made:

1. Paragraph (3) is hereby repealed.

2. in the Al. 4, the words "on the recommendation" shall be replaced by "decision".

3. Paragraph 5 shall be repealed.

4. in the Al. 7, after the word "report" is added "within one month".

§ 2. In art. 13 al. 3 is repealed.

§ 3. In art. 16 in the text before paragraph 1, after the words "as a body of the National Revenue Agency" a comma and add "as an inspector at the public supervision of registered Auditors".

§ 4. In art. the following 20 amendments:

1. The current text becomes paragraph 1.

2. a para. 2:

"(2) the requirement for internship in al. 1 shall not apply where the gained experience in art. 18, al. 2 is at least three years. "

§ 5. Article 21a shall be replaced by the following:

"Art. 21. (1) the Institute of Chartered Accountants entered in the register under art. 24 each auditor and audit company from a third country who submit an audit report for annual or consolidated accounts of a company incorporated outside the European Union whose transferable securities are admitted to trading on a regulated market in the country, except when the company issued only debt securities within the meaning of art. 100 k, al. 2, item 4, of the Act on public offering of securities admitted to trading on a regulated market, with par value of not less than the equivalent in LEVs of 50,000 euros, or in the case of debt securities denominated in a currency other than the euro, with a nominal value at the date of issue not less than the equivalent in LEVs of 50,000 euros.

(2) the Auditors or audit firms from third countries referred to in paragraph 1. 1 are subject to the system of public oversight, quality assurance system, as well as the inspections, investigations and sanctions provided for in this Act.

(3) paragraph 2 shall not apply in cases where the quality assurance system of another Member State of the European Union or of a third State, considered to be equivalent, has carried out the verification of the quality of the auditor or audit firm under para. 1 during the previous three years.

(4) subject to reciprocity, the Institute of certified public accountants registered auditor from a third country, after the same provide evidence that satisfies the requirements equivalent to those laid down in art. 15-19, and after successfully passing the examinations referred to in art. 18.

(5) subject to reciprocity, the Institute of certified public accountants registered auditing company from a third country after submit evidence that:

1. three quarters of the members of the governing bodies and registered Auditors carrying out the audit on behalf of the enterprise, meet requirements equivalent to those laid down in art. 15-19;

2. the audit firm performs independent financial audit in compliance with the requirements of independence and objectivity and rules equivalent to those laid down in art. 9 and art. 33, para. (2);

3. the audit firm shall publish on its website an annual transparency report, meeting the requirements of art. 40 m, or perform other equivalent disclosure requirements in the event that audit firms operating in the public interest.

(6) the Institute of Chartered Accountants through the Commission for public supervision of registered Auditors shall notify the European Commission of evaluation of reciprocity within the meaning of para. 2 and 3, as well as the main cooperation arrangements with the systems of public oversight, quality assurance and the imposition of sanctions on third States.

(7) the Audit reports on the financial statements and issued by auditors or audit firms from third countries which are not registered in the country of the relevant line, have no legal force. "

§ 6. In art. 23 is made the following changes and additions:

1. In paragraph 1, add "or through the establishment of registered auditor."

2. Section 2 is repealed.

§ 7. In art. 24, para. 2 the words "art. and 19 ' are replaced by ' art. 20. "

§ 8. In art. 26 the words "promulgated in the State Gazette a list of the registered Auditors" are replaced by "published on his official website the list of registered Auditors".

§ 9. In art. 28 (a) after the word "participate" insert "and signed audit opinion '.

§ 10. In art. 33, para. 1 creating a t. 16:

"16. to store the audit records for a period of five years."

§ 11. In art. 35 (b) is hereby amended as follows:

1. In paragraph 8. 2 the word "six" is replaced by "four".

2. in the Al. 3, paragraph 2, the words "to be known and" are deleted.

3. in the Al. 5:

a) point 1 shall be amended as follows:

"1. a person is offered by the Minister of finance;"

b) in paragraph 4, the words "two persons be offered" are replaced by "a person".

4. Paragraph 7 shall be amended as follows:


(7) the Member of the Commission, proposed by the Governing Council of the Institute of certified public accountants, may exercise activities related to independent financial audit. "

§ 12. In art. 35 in the following modifications are made:

1. In paragraph 8. 4, the words "staff" shall be replaced by ' in an employment or service with ".

2. paragraph 6 is replaced by the following:

"(6) the members of the Commission, with the exception of the President, be remunerated for participating in each meeting, in the amount of one minimum wage for the country. The monthly payment may not exceed 50 per cent of the basic monthly remuneration of the President. "

§ 13. In art. 35 (e) is hereby amended as follows:

1. In paragraph 8. 1, paragraph 3, the word "system" is replaced by "systems".

2. in the Al. 2 point 7 shall be replaced by the following:

"7. approves or returns with a request to review the rules of art. 21A; ".

§ 14. In art. 35e is hereby amended as follows:

1. In paragraph 8. 1 the word "four" is replaced by "two".

2. in the Al. 2 the word "four" is replaced with "three".

3. in the Al. 3 the word "five" is replaced by "four".

§ 15. Article 38 shall be amended as follows:

"Art. 38. The Institute of certified public accountants shall be represented by its President. "

§ 16. In art. 39 following amendments and supplements shall be made:

1. Paragraph 2 shall be replaced by the following:

"(2) the general meeting shall adopt bylaws, elected President of the Institute of Chartered Accountants and members of his organs."

2. in the Al. 3 creating the second sentence: "the Chairperson will preside over meetings of the Board."

§ 17. In art. 40 and the following modifications are made:

1. Paragraph 1 shall be amended as follows:

(1) all registered Auditors and audit registered establishments which are members of the Institute of Chartered Accountants and registered Auditors and registered establishments in the Member States of the European Union, or from third countries, are subject to quality control of their activities. "

2. Subparagraphs 3, 4 and 5 be amended thus:

"(3) the system of quality control function, as appointed by the Commission inspectors and inspectors from the Institute of certified public accountants shall carry out quality control inspections under the supervision of the Commission.

(4) the Commission inspectors are in labor or non-labor relations with the Commission. They shall be appointed by order, determined by the regulation of the Commission.

(5) on the basis of the results of the checks carried out by Commission inspectors, as well as the controllers of the Institute of certified public accountants, the Commission is entitled to give instructions that are required for the performance of registered Auditors, and take measures against them. "

3. Paragraph 9 shall be replaced by the following:

(9) a system of quality control in al. 3 shall be financed by:

1. the Commission's budget – for the participation of inspectors in checks for quality control;

2. the funds of the Institute of certified public accountants – for the participation of the controllers in the checks on quality control. "

4. Paragraphs 10, 11, 12 and 13 shall be repealed.

§ 18. In art. 40 (b), para. 1 item 4 shall be amended as follows:

"4. the persons who carry out quality control, to have appropriate professional education and experience in the field of corresponding to independent financial audit and financial reporting and to have undergone training for quality control;".

§ 19. In art. 40 in, al. 1 point 7 is created:

7. check for compliance with the prescriptions of art. 40 a, para. 5. "

§ 20. In art. 40 (e) is hereby amended as follows:

1. In paragraph 8. 1 the second sentence is deleted.

2. in the Al. 2 the figure "4" is replaced by "6".

3. Paragraph 3 is replaced by the following: "(3) quality control Verification under paragraph 1. 1 shall be carried out by the Commission for public supervision of registered Auditors. A copy of the inspection report shall be forwarded to the Institute of certified public accountants. In the check may participate and registered Auditors. "

4. Paragraph 4 is hereby repealed.

§ 21. In art. 40 is the following modifications are made:

1. Paragraph 4 is replaced by the following:

"(4) at least one of the members of the Audit Committee must be independent of the Supervisory Board and to have completed tertiary education majoring in accounting or finance and have at least 5 years work experience in accounting or audit."

2. Paragraph 5 shall be repealed.

§ 22. In art. 40 h al. 2 shall be replaced by the following: "(2) the key audit company auditor and auditor works directly through individual practice, when audit undertaking carrying on business in the public interest, should be withdrawn after they have performed audit engagements for 5 years from the date of appointment to the audited entity. They may not participate in the audit of the same undertaking before the expiry of two years from its withdrawal from the commitment to audit. "

§ 23. In art. at 40, para. 5 the word "audit" shall be deleted.

§ 24. In art. 41 the following modifications are made:

1. In paragraph 8. 1 the words "members of the organs of the Institute of chartered accountants or members of the Commission" shall be replaced by "controllers of the Institute of certified public accountants or inspectors of the Commission".

2. in the Al. 6 the words "members of the organs of the Institute of certified public accountants or a member of the Commission" shall be replaced by "persons found the infringement".

§ 25. In the additional provisions the following amendments and additions:

1. In paragraph 1:

and in paragraph 11) letter "h" is repealed;

(b)) that are 22, 23, 24, 25, 26 and 27:


"22." Inspector "is a person who carries out an activity not related to independent financial audit, and to labor or non-labor relations with the Commission, meets the requirements laid down in this law for qualification and experience and has undergone training for quality control.

23. "expert" is a natural person with specific knowledge of financial markets, financial reporting, auditing, or other areas related to inspections and the practice of audits under this law.

24. "controller" is a person, Member of the Institute of Chartered Accountants, undergone training and quality control for validated controller.

25. "experience in the field of independent financial audit" has experience in the field of accounting, financial reporting and auditing.

26. "check" is a combination of systematic, planned procedures for verifying the quality of the activities of registered Auditors and specialized audit firms and include an assessment of the compliance with the applicable auditing standards and independence requirements, of the quantity and quality of resources spent, of the audit fees and the system of internal quality control.

27. "investigation" is the implementation of a set of procedures to detect, correct and prevent malfunctions of the independent financial audit, as well as violations of the applicable international standards and regulations by registered Auditors and specialized audit firms. "

2. a paragraph 1 (b):

"§ 1 (b). The Commission for public supervision of registered Auditors, shall be the competent authority to which it has entrusted supervision of registered Auditors and audit firms, as well as effective cooperation at Community level with regard to the supervisory activities of the Member States of the European Union. "

Transitional provisions

§ 26. (1) with the entry into force of this law, the term of Office of the members of the Commission, a representative of the Ministry of economy, energy and tourism, and the mandates of the members – representatives of the Institute of Chartered Accountants, are suspended.

(2) the President of the Commission within 14 days of the entry into force of this law provides the National Assembly to elect the representative of the Institute of certified public accountants.

§ 27. The provision of art. 40 h, para. 2 apply for audit engagements for the annual financial statements drawn up after 31 December 2008.

The law was adopted by 41-Otto National Assembly of 1 July 2010 and is stamped with the official seal of the National Assembly.

President of the National Assembly Tsetska Tsacheva:

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