How long can an audit firm remain in the role at an EU public company?

The correct answer reflects the EU regulations regarding the tenure of audit firms serving public companies. Under the EU's statutory audit reform, an audit firm can typically hold an engagement for a maximum of 10 consecutive years. However, this period can be extended to 20 years if the audit firm is engaged in a combined audit with another firm. This means that an audit firm can remain in the role for 10 years, but with certain conditions in place, this period can effectively be extended to 20 years.

This regulation aims to promote the independence of auditors and enhance the quality of audits by ensuring that firms are rotated periodically, thereby preventing the potential for overly familiar relationships between the auditors and the management of the company. The emphasis is on maintaining auditor independence and accountability, which is crucial for investor protection and the overall integrity of the financial markets.