UK Statutory Instrument
2016
United Kingdom
Statutory Auditors and Third Country Auditors Regulations 2016
At a glance
Enforced by
What's here
18 compliance obligations
Penalty landscape
1 of 18 obligations carry a fine up to £1,000. 17 have no criminal penalty — flagged in the list below.
Who this Act binds
Business-side actors with duties under this Act, ranked by how often they appear.
- Any Person 11
- Employee 1
- Trader 1
Plus 5 non-business duties on Crown ministers, regulators, local authorities or tribunals — shown collapsed under each section below.
Other Acts binding the same actors
For each actor bound by this Act, the other UK Acts that bind them most often. Useful for understanding the full compliance landscape facing each role.
Any Person also bound by 2338 other Acts (top 5 shown)
- Human Medicines Regulations 2012 2012 169 duties
- Merchant Shipping Act 1995 1995 144 duties
- Insolvency (England and Wales) Rules 2016 2016 101 duties
- Road Traffic Act 1988 1988 95 duties
- Air Navigation Order 2016 2016 95 duties
Employees also bound by 182 other Acts (top 5 shown)
- Employment Rights (Northern Ireland) Order 1996 (current NI employment law) 1996 13 duties
- Regulation (EU) No 965/2012 (Air Operations) 2012 12 duties
- Shared Parental Leave Regulations 2014 2014 10 duties
- The Income Tax (Pay As You Earn) Regulations 2003 2003 10 duties
- Paternity and Adoption Leave Regulations 2002 2002 9 duties
Traders also bound by 826 other Acts (top 5 shown)
- Value Added Tax Regulations 1995 1995 413 duties
- Companies Act 2006 2006 243 duties
- The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 2008 114 duties
- Insolvency (England and Wales) Rules 2016 2016 62 duties
- Building Societies Act 1986 1986 56 duties
What this Act requires
Sections that create concrete duties on businesses or carry penalties. Procedural and definitional sections are folded into the “Browse other sections” expander at the bottom of each group. Click any section title to read the source text on legislation.gov.uk.
Part 1 — Introduction
Browse 2 other sections in this Part — procedural / definitional / commencement
Interpretation
Part 2 — The Competent Authority
Browse 9 other sections in this Part — procedural / definitional / commencement
The competent authority
General requirements of auditors
The competent authority: sanctioning powers
Publication of sanctions and measures
Enforcement of sanctions
Recovery of financial penalties
Monitoring of audits by the competent authority
Investigation powers
Performance, monitoring and enforcement of third country audit functions
Part 3 — Restrictions on choice of Auditor
Browse 1 other section in this Part — procedural / definitional / commencement
Contractual terms restricting choice of auditor
Part 4 — Miscellaneous
Browse 13 other sections in this Part — procedural / definitional / commencement
Power to grant exemptions from the requirements of Article 4(2) of the Audit Regulation (limit on total fees charged for non-audit services)
Provision of non-audit services
Amendment to the Partnerships (Accounts) Regulations 2008
Amendments to the Companies Act 2006
Amendments to the Building Societies Act 1986
Amendments to other enactments
Amendment of the Companies (Disclosure of Auditor Remuneration and Liability Limitation Agreements) Regulations 2008
Amendments to the Statutory Auditors (Amendment of Companies Act 2006 and Delegation of Functions etc) Order 2012
Amendment of the Statutory Auditors and Third Country Auditors Regulations 2013
Exclusion of large debt securities issuer from definition of “UK-traded third country company”
Amendment of the Companies Act (Transfer of Audit Working Papers to Third Countries) Regulations 2010
Amendment to the Companies (Bodies Concerned with Auditing Standards etc.) (Exemption from Liability) Regulations 2016
Review
Schedules
(1) Standards must ensure that A— (a) has appropriate policies...
- Establish policies and procedures for audit quality and independence Any Person
(1) Standards must ensure that, when A is a firm,...
- Designate a key audit partner and ensure quality, independence and resources Any Person
(1) Standards must ensure that A— (a) keeps records of...
- Keep comprehensive records and documentation for statutory audits Any Person
Standards must ensure that remuneration received or receivable by a...
Other duties (1) — Crown / regulator
- FRC must set audit fee rules on independence from other services Statutory regulator
Standards must ensure that the scope of statutory audit work...
Other duties (1) — Crown / regulator
- FRC must ensure audit standards exclude viability and efficiency assurance Statutory regulator
(1) Standards must ensure that, in the case of a...
- Group auditor must take full responsibility and cooperate with regulators Any Person
(1) In relation to the audit of public interest entities,...
- Keep key audit documents for at least five years Any Person
(1) Standards must ensure that— (a) A is subject to...
- Maintain professional ethics, scepticism and independence during statutory audits Any Person
(1) Standards must ensure that A takes all reasonable steps...
- Take all reasonable steps to maintain audit independence and record threats Any Person
(1) Standards must ensure that A does not accept appointment...
- Auditors must not accept appointment if independence is threatened Any Person
(1) Standards must ensure that— (a) none of the persons...
- Maintain independence: avoid financial interests, conflicts and gifts in statutory audits Employee
Standards must ensure that if, during the financial year of...
- Evaluate and manage independence when audited client is acquired or merges Any Person
(1) Standards must ensure that— (a) where A is an...
- Observe cooling-off periods before joining audited clients Trader
(1) Standards must ensure that, before accepting an appointment as...
Other duties (1) — Crown / regulator
- Assess your competence, resources and independence before accepting an audit appointment Statutory regulator
(1) Standards must ensure adequate provision on confidentiality in relation...
Other duties (1) — Crown / regulator
- FRC must set auditing standards covering confidentiality, handover and independence Statutory regulator
(1) The competent authority may for any purpose related to...
- Provide information to the FRC when requested for audit inspections Any Person
(1) A person commits an offence if the person—
Fine up to £1,000- Obstruct or mislead the audit regulator (FRC) Any Person
For paragraphs 13 and 14 substitute— Monitoring of audits (1) The body must— (a) have adequate arrangements for enabling...
Other duties (1) — Crown / regulator
- Supervisory body must have monitoring and inspection arrangements for statutory auditors Statutory regulator
Browse 86 other Schedules — structural / supplementary
In this Schedule— “A” means a person appointed as a...
(1) If a person fails to comply with a notice...
(1) This paragraph applies if a person provides information (including...
(1) An officer of the competent authority may, for the...
The Act is amended as set out in Parts 2...
(1) Section 491 (term of office of auditors of public...
After section 491 insert— Maximum engagement period: transitional arrangements (1) In the case of an auditor who was first...
After section 494 (disclosure of services provided by auditor or...
(1) Section 495 (auditor's report on company's annual accounts) is...
(1) Section 496 (auditor's report on strategic report and director's...
(1) Section 497A (auditor's report on separate corporate governance statement)...
(1) Section 498 (duties of auditor) is amended as follows....
(1) Section 503 (signature of auditor's report) is amended as...
(1) Section 505 (names to be stated in published copies...
(1) Section 508 (guidance for regulatory and prosecuting authorities: England,...
In this Schedule— (a) a reference to a numbered section...
(1) Section 509 (guidance for regulatory authorities: Scotland) is amended...
(1) Section 510 (resolution removing auditors from office) is amended...
(1) After section 511 (special notice required for resolution removing...
(1) Section 513 (rights of auditor who has been removed...
(1) Section 514 (failure to re-appoint auditor: special procedure required...
(1) Section 515 (failure to re-appoint auditor: special notice required...
(1) Section 519A (meaning of “public interest company”, “non-public interest...
(1) Section 1173 (minor definitions: general) is amended as follows....
(1) Schedule 8 (index of defined expressions) is amended as...
(1) Section 1217 (supervisory bodies) is amended as follows.
(1) Section 461 (permitted disclosure of information obtained under compulsory...
(1) Section 1218 (exemption from liability for damages) is amended...
After section 1223 (matters to be notified to the Secretary...
(1) Section 1223A (notification of matters relevant to other EEA...
After section 1224 (Secretary of State's power to call for...
(1) Section 1224A (restrictions on disclosure) is amended as follows....
(1) Section 1225 (enforcement: general) is amended as follows.
(1) Section 1229 (supervision of Auditors General by the Independent...
(1) Section 1239 (register of auditors) is amended as follows....
(1) Section 1251A (duty of Secretary of State to report...
(1) Section 1252 (delegation of Secretary of State's functions) is...
After section 485 (appointment of auditors of private company: general)...
(1) Section 1253 (delegation of functions to an existing body)...
(1) Section 1253B (requests from EEA competent authorities) is amended...
(1) Section 1253C (notification to competent authorities of other EEA...
(1) Section 1253D (restriction on transfer of audit working papers...
(1) Section 1253DA (transfer by Secretary of State) is amended...
(1) Section 1253DB (transfer by statutory auditor with approval of...
In section 1253DC (transfer by statutory auditor for purposes of...
(1) Section 1253DD (agreement of EEA competent authority) is amended...
(1) Section 1253DE (transfer by means of inspection) is amended...
(1) Section 1253E (working arrangements for transfer of papers) is...
(1) Section 486 (appointment of auditors or private company: default...
(1) Section 1254 (directions to comply with international obligations) is...
(1) Section 1261 (minor definitions) is amended as follows.
(1) Section 1262 (index of defined expressions) is amended as...
Schedule 10 (recognised supervisory bodies) is amended as follows.
(1) Paragraph 2 is amended as follows.
(1) Paragraph 3 is amended as follows.
In Part 2, before paragraph 6, insert— Delegation etc. of...
(1) Paragraph 6 is amended as follows.
(1) Paragraph 9 is amended as follows.
(1) Paragraph 10 is amended as follows.
(1) Section 487 (term of office of auditors of private...
(1) Paragraph 10A is amended as follows.
Omit paragraph 10B.
(1) Paragraph 10C is amended as follows.
For paragraph 11 substitute— The body must have rules and practices designed to ensure...
(1) Paragraph 12 is amended as follows.
(1) Paragraph 15 is amended as follows.
For paragraph 16 substitute— Independent investigation for enforcement purposes (1) The body must have rules and practices designed to...
(1) Paragraph 16A is amended as follows.
(1) Paragraph 16AB is amended as follows.
After section 487 insert— Maximum engagement period: transitional arrangements (1) In the case of an auditor who was first...
After paragraph 20 insert— Supplementary: funding of arrangements (1) This paragraph applies where, under regulation 3 of the...
For paragraph 20A substitute— Interpretation In this Part of this Schedule— “audit reporting requirements” has...
Part 3 is repealed.
(1) Schedule 11A (specified persons, descriptions, disclosures etc for the...
After section 489 (appointment of auditors of public company: general)...
(1) Section 490 (appointment of auditors of public company: default...
In this Schedule— (a) a reference to a numbered section...
Part 8 of the Building Societies Act 1986 is amended...
In section 78 (auditor's report) — (a) in subsection (1),...
In section 78A (signature of auditor's report) —
After section 78C(1) (names to be stated in copies of...
At the beginning of section 78D(1) (circumstances in which names...
In subsection 79 (auditor's duties and powers) —
In Schedule 11— (a) after paragraph 3 insert— (1) Any term in a contract which, in relation to...
Amendments to Part 1 of the Companies (Audit, Investigations and Community Enterprise) Act 2004
Amendments to Schedule 5 to the Local Audit and Accountability Act 2014
Enforcement and responsible bodies
The regulators that administer or enforce this legislation.
Financial Reporting Council
Regulates auditors, accountants, and actuaries. Sets UK Corporate Governance Code and Stewardship Code. Monitors corporate reporting and audit quality. Planned to become …
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