Third Country Audit Entities

Registration of Third Country Auditors

The EU Statutory Audit Directive (the Directive 2006/43/EC) provides for minimum regulatory requirements regarding statutory audits of EU/EEA companies. In addition, the Directive 2006/43/EC provides that, in respect of companies registered outside the EU/EEA and listed on EU regulated markets, third country auditors/audit entities auditing such companies are:

i. required to meet certain criteria; and

ii. to be registered in those EU/EEA member States in which such companies’ securities are listed.

The Directive 2006/43/EC further provides that, where a third country auditor or audit entity does not satisfy the above requirements, any audit report issued will not have legal validity in the EU.

Article 45 of the Directive 2006/43/EC sets out the regulatory requirements for the registration of third country auditors/audit entities, for continuing oversight including, the external monitoring of the quality of their audit work, and for investigations and sanctions,

Article 46 of the Directive 2006/43/EC allows Member States to derogate from these requirements where the third country auditor/audit entity is subject to a system of public oversight, inspections and investigations which the European Commission has recognised as equivalent, or where the third country auditor/audit entity is within transitional arrangements adopted by the European Commission.

Subsequent to the Directive 2006/43/EC having been adopted by the EU, the EU Commission has issued a Decision (2008/627/EC of 29 July 2008), the effect of which is to provide a transitional period for auditors from certain specified third countries from the requirements of Article 45, on the condition that they provide certain information to European Oversight Bodies. The effect of the Decision is that, subject to providing certain specified information to relevant EU authorities, auditors and audit entities from the relevant countries may continue to issue valid audit reports in the EU notwithstanding that the countries concerned have not yet been determined as being equivalent in the context of Article 45 of the Directive.

Third country auditors and audit entities from the following third countries are eligible to avail of the transitional arrangements provided for by the Decision:

Argentina	Malaysia
Australia	Mauritius
Bahamas	Mexico
Bermudas	Morocco
Brazil	New Zealand
Canada	Pakistan
Cayman Islands	Russia
Chile	Singapore
China	South Africa
Croatia	South Korea
Guernsey, Jersey, Isle of Man	Switzerland
Hong Kong	Taiwan
India	Thailand
Indonesia	Turkey
Israel	Ukraine
Japan	United Arab Emirates
Kazakhstan	United States of America

A third country auditor/audit entity with relevant audit clients must decide whether to apply in accordance with the Commission Decision on transitional arrangements (i.e. Form A) or, if the third country auditor/audit entity does not qualify for the transitional arrangements, then an application under Article 45 (i.e. Form B) must be made to the Authority.

Form A can only be used by a third country auditor/audit entity whose “home country” is one of the third countries to which the European Commission has granted a transitional period and who is able to meet the conditions laid down in the Commission Decision (2008/627/EC)

Form B must be used by any other applicant.

To apply for registration, a third country auditor/audit entity must complete and submit the following forms, including all related annexes to the Authority:

1. in Microsoft Excel^© format for online completion

• Form A

• Form B

2. in portable document format (pdf) for manual completion