The Statutory Auditors and Third Country Auditors Regulations 2016

General requirements of auditorsU.K.

This section has no associated Explanatory Memorandum

4.—(1) A person appointed to conduct a statutory audit must conduct that audit in accordance with the relevant standards for the conduct of statutory audits.

(2) The relevant standards are—

(a)the standards of integrity, objectivity, professional competence, due care and professional scepticism as determined by the competent authority in accordance with Schedule 1;

(b)the international auditing standards adopted by the European Commission [F1, before IP completion day] in accordance with Article 26(3) of the Audit Directive (“Commission-adopted international standards”);

[F2(ba)any UK-adopted international standards adopted and imposed by the competent authority in accordance with paragraph (3)(za);]

(c)any auditing standards, procedures or requirements imposed by the competent authority in accordance with paragraph (3)(a);

(d)auditing procedures or requirements imposed by the competent authority in accordance with paragraph (3)(b); and

(e)the requirements of rules and practices of the recognised supervisory body of which the auditor is a member, provided that the rules and practices are rules and practices required by virtue of Part 2 of Schedule 10 to the Act.

(3) The competent authority may—

[F3(za)adopt and impose international auditing standards (“UK-adopted international standards”) where those standards—

(i)have been developed with proper due process, public oversight and transparency;

(ii)are generally accepted internationally;

(iii)contribute a high level of credibility and quality to accounts of audited persons;

(iv)contribute to the public good; and

(v)are consistent with the relevant requirements listed in regulation 5(11);]

(a)impose auditing standards, procedures or requirements which do not cover the same subject-matter as [F4Commission-adopted or UK-adopted international standards]; or

(b)impose auditing procedures or requirements which cover the same subject-matter as [F5Commission-adopted or UK-adopted international standards] but are necessary—

(i)to give effect to any relevant requirement relating to the scope of statutory audit; or

(ii)to add to the credibility and quality of [F6accounts].

[F7(3A) The Secretary of State may by regulations amend the requirements set out in Articles 7, 8 and 18 of the Audit Regulation and in paragraphs 1 to 15 of Schedule 1 to these Regulations, for the purpose of ensuring that, where the competent authority wishes to adopt international auditing standards under regulation 4(3)(za), those requirements are consistent with the standards that the competent authority wishes to adopt.

(3B) Regulations made under paragraph (3A) must not be made unless a draft of the statutory instrument containing them has been laid before Parliament and approved by a resolution of each House of Parliament.]

(4) In this regulation “relevant requirement” has the same meaning as in regulation 5.

Textual Amendments