UK Statutory Instrument SI 2016 United Kingdom

Statutory Auditors and Third Country Auditors Regulations 2016

Read it on legislation.gov.uk (opens in a new tab)
Enforced by
FRC
Status
In Force
Penalty ceiling
Prosecution 1 of 18 obligations carry a fine up to £1,000. 17 have no criminal penalty — flagged in the list below.

Does it bind you?

Business-side roles with duties under this instrument.

Any Person11 Employee1 Trader1

Plus 5 duties on the regulator, Crown ministers and public bodies — folded into the section list below.

Other Acts binding the same actors

If a role above is yours, these are the other instruments that most often bind it.

Any Person — also bound by 2340 other Acts
Employee — also bound by 189 other Acts
Trader — also bound by 825 other Acts
Companies Act 2006 243 duties
Companies Act 1985 85 duties

What it requires

Regulations creating concrete business duties or carrying penalties, grouped as the instrument is structured. Titles link to the source text — blue means you’re leaving for legislation.gov.uk.

Part 1

Introduction

0 of 2 sections shown
2 other sections in this Part — procedural and definitional
s.001 Citation, commencement and application
s.002 Interpretation
Part 2

The Competent Authority

0 of 9 sections shown
9 other sections in this Part — procedural and definitional
s.003 The competent authority
s.004 General requirements of auditors
s.005 The competent authority: sanctioning powers
s.006 Publication of sanctions and measures
s.007 Enforcement of sanctions
s.008 Recovery of financial penalties
s.009 Monitoring of audits by the competent authority
s.010 Investigation powers
s.011 Performance, monitoring and enforcement of third country audit functions
Part 3

Restrictions on choice of Auditor

0 of 1 section shown
1 other section in this Part — procedural and definitional
s.012 Contractual terms restricting choice of auditor
Part 4

Miscellaneous

0 of 13 sections shown
13 other sections in this Part — procedural and definitional
s.013 Power to grant exemptions from the requirements of Article 4(2) of the Audit Regulation (limit on total fees charged for non-audit services)
s.013 Provision of non-audit services
s.014 Amendment to the Partnerships (Accounts) Regulations 2008
s.015 Amendments to the Companies Act 2006
s.016 Amendments to the Building Societies Act 1986
s.017 Amendments to other enactments
s.018 Amendment of the Companies (Disclosure of Auditor Remuneration and Liability Limitation Agreements) Regulations 2008
s.019 Amendments to the Statutory Auditors (Amendment of Companies Act 2006 and Delegation of Functions etc) Order 2012
s.020 Amendment of the Statutory Auditors and Third Country Auditors Regulations 2013
s.021 Exclusion of large debt securities issuer from definition of “UK-traded third country company”
s.022 Amendment of the Companies Act (Transfer of Audit Working Papers to Third Countries) Regulations 2010
s.023 Amendment to the Companies (Bodies Concerned with Auditing Standards etc.) (Exemption from Liability) Regulations 2016
s.024 Review
Schedules

Schedules

18 of 104 shown
s.sch001 (1) Standards must ensure that A— (a) has appropriate policies... Regulated
  • Establish policies and procedures for audit quality and independenceAny Person
s.sch001 (1) Standards must ensure that, when A is a firm,... Regulated
  • Designate a key audit partner and ensure quality, independence and resourcesAny Person
s.sch001 (1) Standards must ensure that A— (a) keeps records of... Regulated
  • Keep comprehensive records and documentation for statutory auditsAny Person
s.sch001 Standards must ensure that remuneration received or receivable by a... Regulated
Other duties (1) — Crown / regulator
  • FRC must set audit fee rules on independence from other servicesStatutory regulator
s.sch001 Standards must ensure that the scope of statutory audit work... Regulated
Other duties (1) — Crown / regulator
  • FRC must ensure audit standards exclude viability and efficiency assuranceStatutory regulator
s.sch001 (1) Standards must ensure that, in the case of a... Regulated
  • Group auditor must take full responsibility and cooperate with regulatorsAny Person
s.sch001 (1) In relation to the audit of public interest entities,... Regulated
  • Keep key audit documents for at least five yearsAny Person
s.sch001 (1) Standards must ensure that— (a) A is subject to... Regulated
  • Maintain professional ethics, scepticism and independence during statutory auditsAny Person
s.sch001 (1) Standards must ensure that A takes all reasonable steps... Regulated
  • Take all reasonable steps to maintain audit independence and record threatsAny Person
s.sch001 (1) Standards must ensure that A does not accept appointment... Regulated
  • Auditors must not accept appointment if independence is threatenedAny Person
s.sch001 (1) Standards must ensure that— (a) none of the persons... Regulated
  • Maintain independence: avoid financial interests, conflicts and gifts in statutory auditsEmployee
s.sch001 Standards must ensure that if, during the financial year of... Regulated
  • Evaluate and manage independence when audited client is acquired or mergesAny Person
s.sch001 (1) Standards must ensure that— (a) where A is an... Regulated
  • Observe cooling-off periods before joining audited clientsTrader
s.sch001 (1) Standards must ensure that, before accepting an appointment as... Regulated
Other duties (1) — Crown / regulator
  • Assess your competence, resources and independence before accepting an audit appointmentStatutory regulator
s.sch001 (1) Standards must ensure adequate provision on confidentiality in relation... Regulated
Other duties (1) — Crown / regulator
  • FRC must set auditing standards covering confidentiality, handover and independenceStatutory regulator
s.sch002 (1) The competent authority may for any purpose related to... Regulated
  • Provide information to the FRC when requested for audit inspectionsAny Person
s.sch002 (1) A person commits an offence if the person— Prosecution
  • Obstruct or mislead the audit regulator (FRC)Any Person

Fine up to £1,000

s.sch003 For paragraphs 13 and 14 substitute— Monitoring of audits (1) The body must— (a) have adequate arrangements for enabling... Regulated
Other duties (1) — Crown / regulator
  • Supervisory body must have monitoring and inspection arrangements for statutory auditorsStatutory regulator
86 other schedules
s.sch001 In this Schedule— “A” means a person appointed as a...
s.sch002 (1) If a person fails to comply with a notice...
s.sch002 (1) This paragraph applies if a person provides information (including...
s.sch002 (1) An officer of the competent authority may, for the...
s.sch003 The Act is amended as set out in Parts 2...
s.sch003 (1) Section 491 (term of office of auditors of public...
s.sch003 After section 491 insert— Maximum engagement period: transitional arrangements (1) In the case of an auditor who was first...
s.sch003 After section 494 (disclosure of services provided by auditor or...
s.sch003 (1) Section 495 (auditor's report on company's annual accounts) is...
s.sch003 (1) Section 496 (auditor's report on strategic report and director's...
s.sch003 (1) Section 497A (auditor's report on separate corporate governance statement)...
s.sch003 (1) Section 498 (duties of auditor) is amended as follows....
s.sch003 (1) Section 503 (signature of auditor's report) is amended as...
s.sch003 (1) Section 505 (names to be stated in published copies...
s.sch003 (1) Section 508 (guidance for regulatory and prosecuting authorities: England,...
s.sch003 In this Schedule— (a) a reference to a numbered section...
s.sch003 (1) Section 509 (guidance for regulatory authorities: Scotland) is amended...
s.sch003 (1) Section 510 (resolution removing auditors from office) is amended...
s.sch003 (1) After section 511 (special notice required for resolution removing...
s.sch003 (1) Section 513 (rights of auditor who has been removed...
s.sch003 (1) Section 514 (failure to re-appoint auditor: special procedure required...
s.sch003 (1) Section 515 (failure to re-appoint auditor: special notice required...
s.sch003 (1) Section 519A (meaning of “public interest company”, “non-public interest...
s.sch003 (1) Section 1173 (minor definitions: general) is amended as follows....
s.sch003 (1) Schedule 8 (index of defined expressions) is amended as...
s.sch003 (1) Section 1217 (supervisory bodies) is amended as follows.
s.sch003 (1) Section 461 (permitted disclosure of information obtained under compulsory...
s.sch003 (1) Section 1218 (exemption from liability for damages) is amended...
s.sch003 After section 1223 (matters to be notified to the Secretary...
s.sch003 (1) Section 1223A (notification of matters relevant to other EEA...
s.sch003 After section 1224 (Secretary of State's power to call for...
s.sch003 (1) Section 1224A (restrictions on disclosure) is amended as follows....
s.sch003 (1) Section 1225 (enforcement: general) is amended as follows.
s.sch003 (1) Section 1229 (supervision of Auditors General by the Independent...
s.sch003 (1) Section 1239 (register of auditors) is amended as follows....
s.sch003 (1) Section 1251A (duty of Secretary of State to report...
s.sch003 (1) Section 1252 (delegation of Secretary of State's functions) is...
s.sch003 After section 485 (appointment of auditors of private company: general)...
s.sch003 (1) Section 1253 (delegation of functions to an existing body)...
s.sch003 (1) Section 1253B (requests from EEA competent authorities) is amended...
s.sch003 (1) Section 1253C (notification to competent authorities of other EEA...
s.sch003 (1) Section 1253D (restriction on transfer of audit working papers...
s.sch003 (1) Section 1253DA (transfer by Secretary of State) is amended...
s.sch003 (1) Section 1253DB (transfer by statutory auditor with approval of...
s.sch003 In section 1253DC (transfer by statutory auditor for purposes of...
s.sch003 (1) Section 1253DD (agreement of EEA competent authority) is amended...
s.sch003 (1) Section 1253DE (transfer by means of inspection) is amended...
s.sch003 (1) Section 1253E (working arrangements for transfer of papers) is...
s.sch003 (1) Section 486 (appointment of auditors or private company: default...
s.sch003 (1) Section 1254 (directions to comply with international obligations) is...
s.sch003 (1) Section 1261 (minor definitions) is amended as follows.
s.sch003 (1) Section 1262 (index of defined expressions) is amended as...
s.sch003 Schedule 10 (recognised supervisory bodies) is amended as follows.
s.sch003 (1) Paragraph 2 is amended as follows.
s.sch003 (1) Paragraph 3 is amended as follows.
s.sch003 In Part 2, before paragraph 6, insert— Delegation etc. of...
s.sch003 (1) Paragraph 6 is amended as follows.
s.sch003 (1) Paragraph 9 is amended as follows.
s.sch003 (1) Paragraph 10 is amended as follows.
s.sch003 (1) Section 487 (term of office of auditors of private...
s.sch003 (1) Paragraph 10A is amended as follows.
s.sch003 Omit paragraph 10B.
s.sch003 (1) Paragraph 10C is amended as follows.
s.sch003 For paragraph 11 substitute— The body must have rules and practices designed to ensure...
s.sch003 (1) Paragraph 12 is amended as follows.
s.sch003 (1) Paragraph 15 is amended as follows.
s.sch003 For paragraph 16 substitute— Independent investigation for enforcement purposes (1) The body must have rules and practices designed to...
s.sch003 (1) Paragraph 16A is amended as follows.
s.sch003 (1) Paragraph 16AB is amended as follows.
s.sch003 After section 487 insert— Maximum engagement period: transitional arrangements (1) In the case of an auditor who was first...
s.sch003 After paragraph 20 insert— Supplementary: funding of arrangements (1) This paragraph applies where, under regulation 3 of the...
s.sch003 For paragraph 20A substitute— Interpretation In this Part of this Schedule— “audit reporting requirements” has...
s.sch003 Part 3 is repealed.
s.sch003 (1) Schedule 11A (specified persons, descriptions, disclosures etc for the...
s.sch003 After section 489 (appointment of auditors of public company: general)...
s.sch003 (1) Section 490 (appointment of auditors of public company: default...
s.sch004 In this Schedule— (a) a reference to a numbered section...
s.sch004 Part 8 of the Building Societies Act 1986 is amended...
s.sch004 In section 78 (auditor's report) — (a) in subsection (1),...
s.sch004 In section 78A (signature of auditor's report) —
s.sch004 After section 78C(1) (names to be stated in copies of...
s.sch004 At the beginning of section 78D(1) (circumstances in which names...
s.sch004 In subsection 79 (auditor's duties and powers) —
s.sch004 In Schedule 11— (a) after paragraph 3 insert— (1) Any term in a contract which, in relation to...
s.sch005 Amendments to Part 1 of the Companies (Audit, Investigations and Community Enterprise) Act 2004
s.sch005 Amendments to Schedule 5 to the Local Audit and Accountability Act 2014

Duty extraction and severity labels are Guvnor’s analysis of the instrument, not the instrument itself. Always verify against the linked source text.