C5C1C2C3C4Part 42Statutory Auditors
Pt. 42 modified (6.4.2008) by The Statutory Auditors and Third Country Auditors Regulations 2007 (S.I. 2007/3494), reg. 43
Pt. 42: functions transferred in part (6.4.2008 in accordance with art. 1 of the amending S.I.) by The Statutory Auditors (Delegation of Functions etc) Order 2008 (S.I. 2008/496), art. 4 (which amending S.I. was revoked (2.7.2012) by S.I. 2012/1741, art. 6)
Pt. 42 applied (with modifications) (15.8.2008) by The Insurance Accounts Directive (Lloyd's Syndicate and Aggregate Accounts) Regulations 2008 (S.I. 2008/1950), reg. 6(5)
Pt. 42: functions transferred in part (2.7.2012) by The Statutory Auditors (Amendment of Companies Act 2006 and Delegation of Functions etc) Order 2012 (S.I. 2012/1741), arts. 1(2), 7, 8, 9 (with art. 16)
Chapter 5Registered third country auditors
Introductory
I11241F1Meaning of “registered third country auditor” and “UK-traded non-EEA company”
1
In this Part—
F2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“registered third country auditor” means a third country auditor who is entered in the register kept in accordance with regulations under section 1239(1).
2
F3 In this Part “ UK-traded non-EEA company ” means a body corporate—
a
which is incorporated or formed under the law of F4a third country ,
b
whose transferable securities are admitted to trading on a regulated market situated or operating in the United Kingdom, and
c
which has not been excluded, or is not of a description of bodies corporate which has been excluded, from this definition by an order made by the Secretary of State.
3
For this purpose—
“regulated market” has the meaning given by
F11Article 4.1(14) of Directive2004/39/ECF11Article 4.1.21 of Directive 2014/65/EU of the European Parliament and of the Council on markets in financial instruments;“transferable securities” has the meaning given by
F12Article 4.1(18)F12Article 4.1.44 of that Directive.
4
An order under this section is subject to negative resolution procedure.
Duties
1242Duties of registered third country auditors
1
A registered third country auditor F5who audits the accounts of a UK-traded non-EEA company must participate in—
a
arrangements within paragraph 1 of Schedule 12 (arrangements for independent monitoring of audits F6. . . ), and
b
arrangements within paragraph 2 of that Schedule (arrangements for independent investigation for disciplinary purposes F10...).
2
A registered third country auditor must—
a
take such steps as may be reasonably required of it to enable its performance of F7audits of accounts of UK-traded non-EEA companies to be monitored by means of inspections carried out under the arrangements mentioned in subsection (1)(a), and
b
comply with any decision as to disciplinary action to be taken against it made under the arrangements mentioned in subsection (1)(b).
3
Schedule 12 makes further provision with respect to the arrangements in which registered third country auditors are required to participate.
4
The Secretary of State may direct in writing that subsections (1) to (3) are not to apply, in whole or in part, in relation to
F8a
a particular registered third country auditor or class of registered third country auditors.
F9b
audits of the accounts of a particular UK-traded non-EEA company or class of UK-traded non-EEA companies;
c
audits by a particular registered third country auditor or class of registered third country auditors of the accounts of a particular UK-traded non-EEA company or class of UK-traded non-EEA companies.
Information
1243Matters to be notified to the Secretary of State
1
The Secretary of State may require a registered third country auditor—
a
to notify him immediately of the occurrence of such events as he may specify in writing and to give him such information in respect of those events as is so specified;
b
to give him, at such times or in respect of such periods as he may specify in writing, such information as is so specified.
2
The notices and information required to be given must be such as the Secretary of State may reasonably require for the exercise of his functions under this Part.
3
The Secretary of State may require information given under this section to be given in a specified form or verified in a specified manner.
4
Any notice or information required to be given under this section must be given in writing unless the Secretary of State specifies or approves some other manner.
1244The Secretary of State's power to call for information
1
The Secretary of State may by notice in writing require a registered third country auditor to give him such information as he may reasonably require for the exercise of his functions under this Part.
2
The Secretary of State may require that any information which he requires under this section is to be given within such reasonable time and verified in such manner as he may specify.
Enforcement
1245Compliance orders
1
If at any time it appears to the Secretary of State that a registered third country auditor has failed to comply with an obligation imposed on him by or by virtue of this Part, the Secretary of State may make an application to the court under this section.
2
If on an application under this section the court decides that the auditor has failed to comply with the obligation in question, it may order the auditor to take such steps as the court directs for securing that the obligation is complied with.
3
In this section “the court” means the High Court or, in Scotland, the Court of Session.
I21246Removal of third country auditors from the register of auditors
1
The Secretary of State may, by regulations, confer on the person keeping the register in accordance with regulations under section 1239(1) power to remove a third country auditor from the register.
2
Regulations under this section must require the person keeping the register, in determining whether to remove a third country auditor from the register, to have regard to the auditor's compliance with obligations imposed on him by or by virtue of this Part.
3
Where provision is made under section 1239(4) (different parts of the register to be kept by different persons), references in this section to the person keeping the register are to the person keeping that part of the register which relates to third country auditors.
4
Regulations under this section are subject to negative resolution procedure.
1247Grants to bodies concerned with arrangements under Schedule 12
In section 16 of the Companies (Audit, Investigations and Community Enterprise) Act 2004 (c. 27) (grants to bodies concerned with accounting standards etc), after subsection (2)(ka) (inserted by section 1238) insert—
kb
establishing, maintaining or carrying out arrangements within paragraph 1 or 2 of Schedule 12 to the Companies Act 2006;
Pt. 42 applied (with modifications) (4.4.2014 for specified purposes, 16.12.2014 in so far as not already in force) by Local Audit and Accountability Act 2014 (c. 2), s. 49(1), Sch. 5 paras. 1-27 (with Sch. 13 para. 11); S.I. 2014/900, art. 2(j); S.I. 2014/3319, art. 2(e) (as amended: (31.12.2020) by S.I. 2019/177, regs. 2, 57; 2020 c. 1, Sch. 5 para. 1(1) and S.I. 2019/504, regs. 1(2), 3-6; 2020 c. 1, Sch. 5 para. 1(1); and (1.7.2022) by 2022 c. 31, s. 186(6), Sch. 4 para. 216, Sch. 7 para. 28; S.I. 2022/734, reg. 2(a), Sch. (with regs. 13, 29, 30))