Friday, February 3, 2023
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Friday, February 3, 2023
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UK and EEA Audits: Auditing for UK auditors and audit firms operating in the European Economic Area (EEA)

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UK and EEA Audits guidance for UK auditor firms, UK auditors, and UK-qualified audit professionals operating in the EEA.

UK auditors, and audit firms.

The rules for auditing UK-based companies that operate solely in the UK are unchanged. UK companies that operate in European Economic Area countries (EEA) must comply with the specific regulations.

Recognizance of UK Audit Qualifications in EEA Countries.

It is possible that your UK qualification will not be recognized in EEA countries. To find out the status of your registration, you should contact the competent authority in which you are registered.

UK audit firms auditing EEA companies.

An audit report for an EEA business may not allow you to sign it. To find out the status of your registration, you should consult the competent authority in which you are registered.

Third-country auditors for non-EEA listed companies on EEA regulated market

These audits can only be performed if you register with the appropriate authority in the EEA country where the market is based as soon as possible.

Businesses are considered public interest entities.

The Audit Regulation is a UK law that applies to banks, building societies, insurers, and securities issuers trading on UK-regulated markets.

If your business only issues securities that can be traded on EEA regulated market, it is not considered a public interest entity.

Groups of companies for auditing.

Restrictions on subsidiary businesses in the EEA

Non-audit service blacklisted: All overseas subsidiaries of UK public interests entities are prohibited from providing non-audit service.

  • If provided by a UK public-interest entity, non-audit services will be prohibited;
  • Blacklisted services are not permitted to non-EEA subsidiary firms that are part of the same network as a UK auditor for a UK public concern entity.

Transparency and Disclosure Rules for Audit Committees

UK issuers, whether of shares or bonds securities, that are only permitted to trade on EEA regulated market are exempt from the Disclosure and Transparency Rules (FCA).

All other UK public interest entities must comply with the Disclosure and Transparency Rules of the FCA and the relevant rules of the Prudential Regulation Authority.

Exemptions to subsidiaries.

These rules exempt subsidiaries so long as they are incorporated in the UK.

  • If a subsidiary issues securities on UK-regulated markets, it can be subject to the FCA or PRA rules.
  • Only banks and insurers that are eligible for PRA exemptions must have a parent business that is subject to PRA rules.

Ownership UK audit firms.

Unless they are both qualified, you cannot include an EEA auditor in the required majority of qualified owners or managers for your UK company if:

  • Based in Republic of Ireland
  • Register with an Irish Recognised Accountancy Body, which is also a UK Recognised Supervising Body

Ownership of EEA auditor firms.

It is unlikely that you’ll be permitted to continue as an auditor in the UK or UK-based audit firm in EEA firms with the required majority of qualified owners and managers. To find out the status of your registration, you should contact the competent authority in the country where you are registered.

EEA auditors, and audit firms

Auditing for the European Economic Area (EEA), auditors and audit firms operating within the UK

Statutory auditors.

  • You can sign audit reports if you have been registered as a UK-recognized professional body.
  • It is not possible to register as a UK statutory auditor based on an EEA qualification.
  • If you are already registered in Ireland with a Recognised Accountancy Body, (RAB), which is also a Recognised Supervisory Body in the UK, then you don’t need to register in the UK.

Registration as an EEA-based auditor in a third country of an EEA-listed company on a UK-regulated marketplace.

  • Register with the Financial Reporting Council to perform these audits.
  • This should be done as soon as you can, starting on January 20, 2021.

Ownership of EEA auditor firms.

If you require a majority of qualified owners or managers, it may be necessary to restructure your company to remain EEA-approved.

  • UK audit firms
  • UK-accredited auditors

Ownership UK audit firms.

An EEA auditor, firm, or representative cannot be included in a UK company’s required majority of qualified owners and managers.

If they are both EEA auditors or firms, you can include them if:

  • Based in Republic of Ireland
  • Register with a Recognised Accounting Body, which is also a UK Recognised Supervising Body

If you found this article helpful, please go to the rest of the website to read more on AccountingAuditTaxationFinancial PlanningMoneyCloudFinancial Technologies (Fintech) in The United Kingdom, and International

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