The Statutory Auditors and Third Country Auditors Regulations 2016

PART 4 U.K. Miscellaneous

Power to grant exemptions from the requirements of Article 4(2) of the Audit Regulation (limit on total fees charged for non-audit services) U.K.

13.—(1) The competent authority may grant to a statutory auditor, in relation to the provision of services to an audited person, an exemption from the requirements of Article 4(2) of the Audit Regulation.

(2) The competent authority must be satisfied that exceptional circumstances exist before granting an exemption under this regulation.

(3) An exemption granted under this regulation may apply—

(a) for one financial year, or

(b) for two consecutive financial years.

[F1 Provision of non-audit services U.K.

13A.   The competent authority may, within the standards on professional ethics that it determines in accordance with Schedule 1, allow the provision of the services referred to in points (a) (i), (a) (iv) to (a) (vii) and (f) of the second subparagraph of Article 5(1) of the Audit Regulation, provided that the following requirements are complied with—

(a) they have no direct or have immaterial effect, separately or in the aggregate on the audited accounts;

(b) the estimation of the effect on the audited accounts is comprehensively documented and explained in the additional report to the audit committee referred to in Article 11 of the Audit Regulation; and

(c) the principles of independence laid down in Part 42 of the Companies Act 2006 and these Regulations are complied with by the statutory auditor.]

Textual Amendments

F1 Reg. 13A inserted (22.2.2019) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 107

Amendment to the Partnerships (Accounts) Regulations 2008 U.K.

14.—(1) The Partnerships (Accounts) Regulations 2008 are amended as follows.

(2) In regulation 9 (functions of auditor), after paragraph (1)(a) insert—

“(aa) section 496 (auditor's report on strategic report and director's report);”.

Amendments to the Companies Act 2006 U.K.

15.  Schedule 3 has effect.

Amendments to the Building Societies Act 1986 U.K.

16.  Schedule 4 has effect.

Amendments to other enactments U.K.

17.  Schedule 5 has effect.

Amendment of the Companies (Disclosure of Auditor Remuneration and Liability Limitation Agreements) Regulations 2008 U.K.

18.—(1) The Companies (Disclosure of Auditor Remuneration and Liability Limitation Agreements) Regulations 2008 M1 are amended as follows.

(2) In regulation 4 (disclosure of remuneration: small and medium-sized companies)—

(a) in paragraph (1), omit “small or”; and

(b) omit paragraph (4).

(3) In regulation 6 (group accounts), for sub-paragraph (2)(b) substitute—

“(b) a subsidiary company where—

(i) its parent is required to prepare and does prepare group accounts in accordance with the Act,

(ii) the company is included in the consolidation, and

(iii) the statutory auditor is the same for both the company and its parent;”.

Marginal Citations

M1 S.I. 2008/489. There are no relevant amending instruments.

Amendments to the Statutory Auditors (Amendment of Companies Act 2006 and Delegation of Functions etc) Order 2012 U.K.

19.—(1) The Statutory Auditors (Amendment of Companies Act 2006 and Delegation of Functions etc) Order 2012 M2 is amended as follows.

(2) After article 7(5) (transfer of functions) insert—

“(6) In this article—

(a) the reference in paragraph (1) to the functions of the Secretary of State under Part 42 of the Companies Act 2006 includes a reference to functions which have been amended by the Statutory Auditors and Third Country Auditors Regulations 2016; and

(b) references to provisions of the Companies Act 2006 in paragraphs (2) to (5) include amendments made to those provisions by the Statutory Auditors and Third Country Auditors Regulations 2016.”.

Marginal Citations

M2 S.I. 2012/1741.

Amendment of the Statutory Auditors and Third Country Auditors Regulations 2013 U.K.

20.—(1) The Statutory Auditors and Third Country Auditors Regulations 2013 M3 are amended as follows.

(2) In regulation 8 (application statement)—

(a) for paragraph (d) substitute—

“(d) the third country auditor conducts audits of UK-traded non-EEA companies in accordance with—

(i) the international auditing standards adopted by the European Commission in accordance with Article 26(3) of the Audit Directive, or with standards which are equivalent,

(ii) any auditing standards, procedures or requirements imposed by the competent authority in accordance with regulation 4(3)(a) of the Statutory Auditors and Third Country Auditors Regulations 2016, or with standards, procedures or requirements which are equivalent, and

(iii) the requirements set out in Articles 22, 22b and 25 of the Audit Directive (independence, objectivity and audit fees), or with requirements which are equivalent;”;

(b) omit paragraph (e); and

(c) in paragraph (f) for “Article 40 of the Audit Directive” substitute “ Article 13 of the Audit Regulation ”.

(3) Omit regulation 13.

Marginal Citations

M3 S.I. 2013/1672.

Exclusion of large debt securities issuer from definition of “[F2 UK-traded third country company]” U.K.

21.—(1) A large debt securities issuer is excluded from the definition of “ [F3 UK-traded third country company]” for the purposes of Part 42 of the Act.

(2) In paragraph (1) “large debt securities issuer” means a body corporate whose only issued transferable securities admitted to trading on a [F4 UK regulated market] are debt securities, the denomination per unit of which is not less than—

(a) 50,000 euros or an equivalent amount, in the case of securities admitted to trading on a [F4 UK regulated market] before 31st December 2010,

(b) 100,000 euros or an equivalent amount, in the case of securities admitted to trading on a [F4 UK regulated market] on or after 31st December 2010.

(3) In paragraph (2)—

“an equivalent amount” means an amount of a currency other than euros which at the date the security was issued was equivalent to the relevant amount of euros; and

“debt securities” has the same meaning as in Article 2(1)(b) of Directive 2004/109/EC of the European Parliament and of the Council on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/43/EC.

(4) Regulation 43 of the Statutory Auditors and Third Country Auditors Regulations 2007 M4 is revoked.

Textual Amendments

F2 Words in reg. 21 heading substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 72(a); 2020 c. 1, Sch. 5 para. 1(1)

F3 Words in reg. 21(1) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 72(b); 2020 c. 1, Sch. 5 para. 1(1)

F4 Words in reg. 21(2) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 72(c); 2020 c. 1, Sch. 5 para. 1(1)

Marginal Citations

M4 S.I. 2007/3494.

Amendment of the Companies Act (Transfer of Audit Working Papers to Third Countries) Regulations 2010 U.K.

22.—(1) The Companies Act 2006 (Transfer of Audit Working Papers to Third Countries) Regulations 2010 M5 are amended as follows.

(2) Omit—

(a) regulation 1(3); and

(b) regulation 4.

Marginal Citations

M5 S.I. 2010/2537, amended by S.I. 2013/1672.

Amendment to the Companies (Bodies Concerned with Auditing Standards etc.) (Exemption from Liability) Regulations 2016 U.K.

23.—(1) The Companies (Bodies Concerned with Auditing Standards etc.) (Exemption from Liability) Regulations 2016 M6 are amended as follows.

(2) In regulation 2, in paragraph (2), after “(2)(a) to (d)” insert “ , (ea) ”.

Marginal Citations

M6 S.I. 2016/571.

Review U.K.

24.—(1) The Secretary of State must from time to time—

(a) carry out a review of the provisions of these Regulations,

(b) set out the conclusions of the review in a report, and

(c) publish the report.

(2) The report must, in particular—

(a) set out the objectives intended to be achieved by those provisions,

(b) assess the extent to which those objectives are achieved,

(c) assess whether those objectives remain appropriate, and

(d) if those objectives remain appropriate, assess the extent to which they could be achieved in another way which involves less onerous regulatory provision.

F5 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) The first report under this regulation must be published before the end of the period of five years beginning with the date on which these Regulations come into force.

(5) Subsequent reports under this regulation must be published at intervals not exceeding five years.

(6) In this regulation, “regulatory provision” has the meaning given by section 32(4) of the Small Business, Enterprise and Employment Act 2015 M7 .

Textual Amendments

F5 Reg. 24(3) omitted (31.12.2020) by virtue of The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 73; 2020 c. 1, Sch. 5 para. 1(1)

Marginal Citations

M7 2015 c. 26.