Italy

Member Organizations

Member Organization Associate

  Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili

Legal and Regulatory Environment

  • Overview of Statuatory Framework for Accounting and Auditing

    Italy, as a member of the European Union (EU), is subject to the accounting, auditing, and financial reporting national legislation and to the directives and regulations issued by the European Commission, which have been transposed into national law.

    The EU Regulation EC 1606/2002 and the Legislative Decree 38/2005 required companies to apply IFRS as endorsed by the EU. Following this regulation, the Legislative Decree 145/2018, restricted the scope provided by the Legislative Decree No. 38/2005 and required that IFRS are mandatory only for listed companies, monitored by the Commissione Nazionale per le Società e la Borsa (CONSOB). In addition, the Legislative Decree 145/2018 established that all other companies can choose to apply IFRS or Italian Accounting Standards.

    Accounting requirements set in the Civil Code (art.2423-2435-bis, c.c.)—as amended by the Legislative Decree No. 139/2015, which implements the Accounting Directive 34/2013/EU—can be applied in the preparation of financial statements of all companies that are not obliged to apply IFRS. The Civil Code requirements are interpreted and integrated into the Italian Accounting Standards issued by the Organismo Italiano di Contabilità, under Law No. 116/2014. The Italian Accounting Standards differ from IFRS; however, there is reportedly a convergence process underway to align the national standards with international standards.

    The auditing requirements in Italy are set in the Legislative Decree No. 39/2010—applicable to all statutory audits—and Legislative Decree 58/1998—applicable to statutory audits of Public Interest Entities (PIEs), including, among others, listed entities, financial institutions, insurance companies, and pension funds—which transposes the Audit Directive and Regulation (EU) No 537/2014 and EU Regulation 56/2014.

    In Italy, all PIEs and companies limited by shares and partnerships limited by shares, are required to have audited financial statements. In addition, Limited Liability Companies, are required to undergo an audit if it meets one of the following criteria: (i) is required to prepare consolidated financial statements; (ii) controls a company whose financial statements are required to be audited; and (iii) has exceeded, for two consecutive years, at least one of the three following quantitative criteria: (a) total balance sheet assets: EUR 4 million; (b) revenues from sales and services: EUR 4 million; and (c) an average number of employees in the fiscal year: 20.

    In accordance with the Legislative Decree No. 39/2010, all audits must be conducted by statutory auditors (Revisori Legali) enrolled with the register of statutory auditors held by the Ministry of Economy and Finance (MEF) following national auditing standards. As reported by the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC), the standards are fully compliant with 2016–2017 ISA and are prepared by a special advisory panel led by the Italian professional body—CNDCEC and professional associations (Associazione Italiana Revisori Contabili ( HYPERLINK "http://www.assirevi.com/" Assirevi) and Istituto Nazionale Revisori Legali) and CONSOB. The drafted standards are then formally adopted with a ministerial act issued by the MEF.

  • Regulation of Accountancy Profession

    The Legislative Decree No. 139/05, Legislative Decree No. 39/2010, and Decree No. 135/2016 constitute the key legislation establishing the regulatory framework for the accountancy profession.

    Professional Accountants

    The Legislative Decree No. 139/05 establishes the regulatory framework for professional accountants, including the responsibilities of the organizations responsible for the regulation of the accountancy profession, including the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) and the Ministry of Justice.

    Professional accountants may be qualified as one of the following designations, both subject to the general supervision of the Ministry of Justice, with associated rights and responsibilities:

    • Esperti Contabili—authorized to deliver accounting services, perform tax fillings, and perform limited audit functions.
    • Dottori Commercialisti—authorized to perform the same services as Esperti Contabili as well as to undertake company appraisals, insolvency procedures, defend clients before tax courts, and perform full scope audit and assurance services for non-statutory audits.

    In accordance with the Legislative Decree No. 139/05, Dottori Commercialista and Esperti Contabili are subject to educational requirements, delivered by the universities, practical experience requirements, and passing state final examinations as well as fulfill the detailed requirements set by the Ministry of Education, University, and Research, and to be registered members of the CNDCEC.

    The CNDCEC is designated by the Legislative Decree No. 139/05 as the responsible entity for: (i) developing ethical requirements for its members; (ii) monitoring and enforcing its members’ compliance with the profession’s technical and ethical standards; (iii) assessing and approving the continuing professional development (CPD) programs established by the territorial chapters; (iv) representing the profession at the national and international level; and (iv) formulating opinions on draft laws, as necessary.

    Statutory Auditors

    The Legislative Decree No. 39/2010 and Decree No. 135/2016 prescribe the initial and continuing professional development, and registration requirements for statutory auditors or Revisori Legali and the main functions of the organizations charged with the public oversight of auditors, Ministry of Economy and Finance (MEF) and Commissione Nazionale per le Società e la Borsa (CONSOB).

    Dottori Commercialista and Esperti Contabili can become statutory auditors or Revisori Legali if they meet the IPD requirements specified in the Legislative Decree No. 39/2010 and Decree No. 135/2016. To become a Revisori Legali, individuals must hold a university degree of at least three years, complete a supervised three-year practical experience requirement, and complete a national examination to register with the MEF.

    The MEF’s responsibilities regarding the Revisori Legali include: (i) endorsing the auditing standards and the code of ethics for statutory auditors; (ii) establishing a quality assurance (QA) review system for audits of non-PIEs; and (iii) implementing disciplinary measures and possible sanctions for statutory auditors of non-PIEs.

    Revisori Legali, who audit PIEs, are subject to the oversight of the CONSOB, in accordance with the Legislative Decree No. 39/2010. The CONSOB is responsible for: (i) overseeing the organization and activities of statutory auditors and audit companies of PIEs; (ii) monitoring the respective statutory auditors’ and audit companies’ independence and technical competence; (iii) establishing a QA review system for the statutory audits of PIEs; and (iv) investigating and disciplining statutory auditors of PIEs for misconduct and breach of the rules and legal requirements.

    In accordance with the Legislative Decree No. 139/2005, the CNDCEC, Istituto Nazionale Revisori Legali (INRL), and the Associazione Italiana Revisori Contabili (ASSIREVI)—the latter two being voluntary associations comprised of auditors and audit firms—constitute the special advisory panel in charge of drafting the auditing standards and the code of ethics for auditors for MEF’s endorsement.

  • Audit Oversight Arrangements

    In accordance with the Legislative Decree No. 39/2010, which transposes the requirements of the EU Directive 2006/43/EC on statutory audits of annual accounts and consolidated accounts, the audit oversight system in Italy consists of the Ministry of Economy and Finance (MEF) and the Commissione Nazionale per le Società et la Borsa (CONSOB).

    According to the abovementioned decree, the MEF is responsible for a wide range of activities related to the audit profession, including: (i) approving and registering statutory auditors; (ii) endorsing the auditing standards and the code of ethics for statutory auditors; (iii) establishing a quality assurance (QA) review system for audits of non-Public Interest Entities (non-PIEs); and (iv) implementing disciplinary measures and possible sanctions for statutory auditors of non-PIEs.

    Additionally, under the same decree, the CONSOB is responsible for: (i) overseeing the organization and activities of statutory auditors and audit companies of PIEs; (ii) monitoring the respective statutory auditors’ and audit companies’ independence and technical competence; (iii) establishing a QA review system for the statutory audits of PIEs; and (iv) investigating and disciplining statutory auditors of PIEs for misconduct and breach of the rules and legal requirements.

    The CONSOB is a member of the International Organization of Securities Commissions and the International Forum of Independent Audit Regulators.

  • Professional Accountancy Organizations

    The Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC)

    The CNDCEC is a mandatory membership organization for professional accountants established by the Legislative Decree No. 139/05. Its members include Esperti Contabili (accountants who are authorized to deliver accounting services, perform tax fillings, and limited audit functions) and Dottori Commercialista (accountants who are authorized to perform the same services as Esperti Contabili and may also undertake company appraisals, insolvency procedures, defend clients before tax courts, and perform full scope audit and assurance services for non-statutory audits). According to Article 29 of the Legislative Decree No. 139/2005, the CNDCEC operates as the umbrella organization that coordinates territorial chapters.

    The CNDCEC is responsible for a wide range of activities including: (i) developing ethical requirements for its members; (ii) monitoring and enforcing its members’ compliance with the profession’s technical and ethical standards; (iii) assessing and approving the continuing professional development programs established by the territorial chapters; (iv) representing the profession at national and international level; and (iv) formulating opinions on draft laws, as necessary.

    In addition to being an IFAC member, the CNDCEC is also a member of Accountancy Europe, the European Federation of Accountants and Auditors, the Latin Integration Committee of Europe and the Americas, and the Fédération des Experts-Comptables Méditerranéens.

  • Projects or Other Information

Adoption of International Standards

  • Quality Assurance

    In accordance with the Legislative Decree No. 39/2010, the Ministry of Economy and Finance (MEF) is responsible for establishing a quality assurance (QA) review system for audits of financial statements of non-Public Interest Entities (non-PIEs), and the Commissione Nazionale per le Società et la Borsa (CONSOB) is responsible for the QA of audits of PIEs.

    Accordingly, CONSOB conducts QA reviews for all public interest entities (PIEs), including, among others, listed entities, credit institutions, insurance companies, and pension funds. The Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) reports that CONSOB’s QA system is aligned with SMO 1 best practices.

    As reported by the CNDCEC, the MEF is expected to design and implement a QA system for non-PIEs. However, there is no clear timeline for the final adoption of the QA system for non-PIEs.

    Current Status: Partially Adopted

  • International Education Standards

    The Legislative Decree No. 139/05 outlines the initial professional development (IPD) requirements for professional accountants. In accordance with the decree, the Ministry of Education, University, and Research is responsible for implementing IPD requirements and the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) is responsible for adopting continuing professional development (CPD) requirements.

    Professional accountants—qualified as either Dottori Commercialista or Esperti Contabilare subject to educational requirements, delivered by the universities, practical experience requirements, and passing state final examinations. Both are also subject to the CPD requirements of the CNDCEC, which as reported by CNDCEC are aligned with the revised IES.

    The IPD and CPD requirements for statutory auditors—Revisori Legali—are established in Legislative Decree No. 39/2010 and Decree No. 135/2016. To become a Revisori Legali, individuals must hold a university degree of at least three years, complete a supervised three-year practical experience requirement, and complete a national examination to register with the MEF.

    Dottori Commercialista and Esperti Contabili can become statutory auditors or Revisori Legali if they meet the IPD requirements specified in the Legislative Decree No. 39/2010 and Decree No. 135/2016.

    The CNDCEC is not directly involved in the establishment of IPD requirements, and further information is required to confirm if the revised IES have been incorporated into the IPD requirements.

    Current Status: Partially Adopted

  • International Standards on Auditing

    In accordance with the Legislative Decree No. 39/2010, all audits must be conducted by statutory auditors (Revisori Legali) enrolled on the register of statutory auditors maintained by the Ministry of Economy and Finance (MEF) and in accordance with national auditing standards (ISA Italia). As reported by the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC), the standards are fully compliant with ISA and are prepared by a special advisory panel led by the CNDCEC, professional associations (Associazione Italiana Revisori Contabili ( HYPERLINK "http://www.assirevi.com/" Assirevi) and Istituto Nazionale Revisori Legali), and the Commissione Nazionale per le Società et la Borsa (CONSOB). The drafted standards are then formally adopted with a ministerial act issued by the MEF.

    The CNDCEC reports that the 2016–2017 Handbook requirements are incorporated, and indicates that the advisory panel submitted to the MEF a recommendation on January 2020, to adopt and incorporate the new and modified requirements of the 2018 Handbook into ISA Italia. As of the date of the assessment, the MEF has not issued the new ministerial act.

    Current Status: Partially Adopted

  • Code of Ethics for Professional Accountants

    The Legislative Decree No. 139/05 grants the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) the responsibility for setting ethical requirements for professional accountants—qualified as either Dottori Commercialista or Esperti Contabil. The CNDCEC issued its Code of Ethics in 2009 and subsequently updated it in 2015 and 2019, taking into consideration the IESBA Code of Ethics, which was last translated into Italian in 2010. The CNDCEC reports that the combination of the legal requirements and the rules incorporated in its Code of Ethics are set in accordance with the IESBA requirements and are more restrictive in some respects.

    For statutory auditors (Revisori Legali), the ethical requirements are set by a special advisory panel led by the CNDCEC, professional associations (Associazione Italiana Revisori Contabili ( HYPERLINK "http://www.assirevi.com/" Assirevi) and Istituto Nazionale Revisori Legali), and the Commissione Nazionale per le Società et la Borsa (CONSOB). The drafted standards are then formally adopted with a ministerial act issued by the MEF.

    In 2013, the special advisory panel developed ethical requirements for statutory auditors based on the 2013 IESBA Code of Ethics. The CNDCEC reports that a ministerial act was issued in November 2018 incorporating confidentiality obligations for statutory audit activity in Italy that are based on the 2012 IESBA Code. Meanwhile, specific independence rules will be enacted in June 2020 to be applied as of January 2021 based on the 2018 International Code.

    Current Status: Partially Adopted

  • International Public Sector Accounting Standards

    Public sector accounting standards are set in Law No. 196/2009. The implementation of the national standards is supported by the Corte dei Conti (Auditor General) and Ragionera Generale dello Stato (State Comptroller), a unit of the Ministry of Economy and Finance. Most public sector entities are still using cash-based accounting, with no linkage to IPSAS, although the CNDCEC reports that legislative changes in this area are anticipated and would mandate a stronger application of accrual-based accounting standards.

    Current Status: Not Adopted

  • Investigation and Discipline

    The Legislative Decree No. 139/05 and the regulation adopted by the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) govern the mechanisms for investigating and disciplining (I&D) professional accountants—qualified as either Dottori Commercialista or Esperti Contabil. Under the law, the territorial chapters are responsible for hearing and judging cases at the first level while the CNDCEC acts as an appeal court. Appeals against the decisions of the CNDCEC can also be filed with the ordinary court. The CNDCEC reports that its system is in line with SMO 6 requirements.

    The CNDCEC conducted an assessment of its territorial chapters I&D policies and processes against the best practices of SMO 6 and identified gaps, such as links with the results of QA reviews and not mandatory requirement to include non-accountants in the disciplinary committee.

    The Legislative Decree No. 39/2010 establishes the main I&D procedures applicable for statutory auditors (Revisori Legali). In accordance with the decree, the Ministry of Economy and Finance is responsible for the I&D procedures of statutory auditors of non- public interest entities (PIEs) whereas the Commissione Nazionale per le Società e la Borsa (CONSOB) is responsible for the I&D system for statutory auditors of PIEs. The CNDCEC reports that while the system fulfills many of best practices of SMO 6, the two-tiered system is expected to be further defined by new Ministerial Decrees and will be coordinated with the QA review system established by CONSOB. There is no clear timeline for the final adoption of the two-tiered system for statutory auditors.

    Current Status: Partially Adopted

  • International Financial Reporting Standards

    The EU Regulation EC 1606/2002 and the Legislative Decree 38/2005 required companies to apply IFRS as endorsed by the EU. Following this regulation, the Legislative Decree 145/2018, restricted the scope provided by the Legislative Decree No. 38/2005 and required that IFRS are mandatory only for listed companies, monitored by the Commissione Nazionale per le Società e la Borsa (CONSOB). All other companies can choose to apply IFRS or Italian Accounting Standards.

    Accounting requirements set in the Civil Code (art.2423-2435-bis, c.c.)—as amended by the Legislative Decree No. 139/2015, which implements the Accounting Directive 34/2013/EU. The Civil Code requirements are interpreted and integrated into the Italian Accounting Standards issued by the Organismo Italiano di Contabilità, in accordance with the Law No. 116/2014. The Italian Accounting Standards differ from IFRS; however, there is reportedly a convergence process underway to align the national standards with international standards.

    Current Status: Partially Adopted

Disclaimer

IFAC bears no responsibility for the information provided in the SMO Action Plans prepared by IFAC member organizations. Please see our full Disclaimer for additional information.

 

Methodology

Methodology
Last updated: 05/2020
We welcome feedback. Please email membership@ifac.org

 

Thank you for your interest in our publications. These valuable works are the product of substantial time, effort and resources, which you acknowledge by accepting the following terms of use. You may not reproduce, store, transmit in any form or by any means, with the exception of non-commercial use (e.g., professional and personal reference and research work), translate, modify or create derivative works or adaptations based on such publications, or any part thereof, without the prior written permission of IFAC.

Our reproduction and translation policies, as well as our online permission request and inquiry system, are accessible on the Permissions Information web page.

For additional information, please read our website Terms of Use. ALL RIGHTS RESERVED.

Agree