International Finance and Accounting Handbook

15 • 35

Italy

Must meet in both fact and appearance

A partner cannot be appointed as director or “statutory” forcompanies quoted on the stock exchange or for other entitiesrequired by law to be audited for at least three years prior tohis or her appointment as auditor; and auditor cannot be ashareholder, employee or manager, or have any contractualcommitment with the entity to be audited for at least threeyears prior to his or her appointment as auditor.

Change in

auditing firm is compulsory every 9 years for listed companies.

France

Form as well as substance of independence; relationships to

Receiving any special benefit from a client or holding an

avoid are detailed by law.

incompatible position as a board member, a part of manage-ment, or an employee. Statutory audits may not provide otherservices (i.e., consulting) in the same company.

Germany

Appearance as well as fact of independence. Relationships to

An auditor must not audit a corporation if 1) he owns shares

avoid are detailed by law.

of or has done the accounting or preparation of financialstatements for the client 2) he is or has been a legal represen-tative, board member or employee of the client in the preced-ing three years, 3) is an owner, legal representative, boardmember or employee of an organization which controls theclient or owns 20% or more shares outstanding of the clientor which has done the accounting or preparation of financialstatements for the client, 4) has earned more than 30% of hisincome from the client in each of the preceding three years.

Similar rules apply to auditing partnerships/companies.

Additionally they may not audit a corporation whose sharesare listed in the .amtlicher Handel. segment of the Germanstock market if the audit done by one who has signed theBestaetigungsvermerk in more than six of the preceding tenyears.

Sweden

The auditor must be independent in both fact and

Any financial interest in or together with a client, and any

appearance.

business interest other than auditing and associated activities.

Exhibit 15.4

Independence.