Guidance for UK audit firms, UK auditors, and those with UK audit qualifications operating in the EEA.
This guidance is for UK auditors and audit firms. There’s different guidance for EEA auditors and audit firms.
The rules for auditing UK companies operating solely in the UK have not changed.
UK companies operating in European Economic Area (EEA) countries need to meet regulations in those countries.
Recognition of UK audit qualifications in EEA countries
Your UK qualification may not be recognised in EEA countries. You should check with the relevant competent authority where you are registered to understand the status of your registration.
UK audit firms auditing EEA companies
You may not be able to sign an audit report for an EEA company. You should check with the relevant competent authority where you are registered to understand the status of your registration.
Third country auditors of non-EEA companies listed on EEA regulated markets
To carry out these audits you should register as soon as possible with the competent authority of the EEA state where the market is based.
Businesses treated as public interest entities
Banks, building societies, insurers and issuers of securities that trade on UK regulated markets are treated as public interest entities and must follow the Audit Regulation as ‘onshored’ in UK law.
Your business is not treated as a public interest entity in the UK if it only issues securities that are admitted to trade on EEA regulated markets.
Auditing groups of companies
Restrictions on subsidiary companies in the EEA
Check with the competent authority in the country where your subsidiary is incorporated if there are any restrictions that apply - for example, sharing information outside the EEA.
Blacklisted non-audit services
Non-audit services are blacklisted for all overseas subsidiaries of UK public interest entities.
- non-audit services are prohibited if provided by the auditor of a UK public interest entity
- firms in the same network as a UK auditor of a UK public interest entity are prohibited from providing blacklisted services to non-EEA subsidiaries
Disclosure and Transparency Rules on Audit Committees
UK issuers of shares or debt securities that are only admitted to trading on EEA regulated markets are not subject to the Disclosure and Transparency Rules issued by the Financial Conduct Authority (FCA).
All other UK public interest entities are subject to the Disclosure and Transparency Rules issued by the FCA and relevant rules issued by the Prudential Regulation Authority (PRA).
Exemptions for subsidiaries
The exemptions in these rules apply to subsidiaries as long as the parent company is incorporated in the UK.
For subsidiaries that issue securities on UK regulated markets, the parent company can be subject to either the FCA or the PRA rules.
Banks or insurers that qualify for PRA exemptions only must have a parent company that is subject to the PRA rules.
Ownership of UK audit firms
You cannot include an EEA auditor or firm in your UK firm’s required majorities of qualified owners and managers, unless they’re both:
- based in the Republic of Ireland
- registered with a Recognised Accountancy Body (RAB) in Ireland that is also a UK Recognised Supervisory Body
Ownership of EEA audit firms
As a UK auditor or UK audit firm it is unlikely that you will be allowed to continue in an EEA firm’s required majorities of qualified owners and managers. Your firm should check with the relevant competent authority where you are registered to understand the status of your registration.