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Audit Regulations and Guidance

Regulations and guidance for those working in the regulated area of audit in the UK, Ireland and the Crown Dependencies.

Current Audit Regulations and Guidance

Firms registered for audit with ICAEW are required to comply with the Audit Regulations and Guidance.

Provisional Audit Regulations for a no deal Brexit

As preparation for a no deal Brexit, a set of Audit Regulations has been provisionally approved. These reflect the UK government’s provisions in Brexit withdrawal legislation. They are indicative of the rules that will apply from the exit date. In the event of an agreed exit many of the provisions contained in these regulations will still apply.

As the evolving divergence between the UK and Ireland audit framework is significantly amplified by Brexit, it is no longer practical to issue joint regulations for the two countries. Therefore these regulations are for the UK only.

The principal changes in these Audit Regulations are;

  • The qualification criteria has been amended to reflect individual qualification pertaining to EEA qualification. This will continue as now, until 31 December 2020. Thereafter it may depend on mutual recognition between the UK and relevant EEA states.
  • The ownership, control and registration criteria ceases to operate (as it pertains to EEA audit firms) on 31 December 2020.
  • Relationships with the EU27 competent authorities are redefined as third country relationships. This affects rules around the sharing of working papers.
  • All references to Irish legislation and rules applicable to Ireland only are removed. Separate regulations have not yet been drafted for Ireland. The joint regulations for Ireland and the UK have been updated for the Irish Companies Act 2018. These will be issued later this year (depending on the timing of Brexit) and will take effect from 1 January 2020. The UK has amended its rules in the event of Brexit deal or no-deal to continue to recognise qualifications on the current basis up until 31 December 2020. No such similar provision has yet been made by EU27 countries in the event of a no deal. Therefore the audit rights in those countries cannot be taken as continuing. Your firm will need to check with the relevant competent authorities for clarification. Continued recognitions in the event of an agreed deal will however apply through the transition period.

The political position for Brexit continues to be fluid. We will continue to work with BEIS, the FRC and the other RSBs to keep firms as best informed as we can.

Audit Regulations and Guidance archive

Audit in Ireland

Audit requirements in the Crown Dependencies of Jersey, Guernsey and Isle of Man

Special arrangements apply to firms that audit companies incorporated in one of the Crown Dependencies which have 'transferable securities' admitted to trading on a 'regulated market' in the EU. The requirements apply even if the firm or company is not operating in a Crown Dependency.

Audit Regulation 3.09 - successor auditors

Access to audit papers on change of audit appointments after 6 April 2008

For financial years starting on or after 6 April 2008, when an auditor ceases to hold an audit appointment, the successor auditor can look at the working papers of the predecessor auditor.

Although this regulation places an obligation on the 'predecessor' auditor, the appointment referred to in the regulation and at the end of the related guidance is that of the 'successor' auditor. It is irrelevant when the predecessor was appointed. (Note, in the article in Audit News 45, about the implementation of audit regulation 3.09, the reference to 'an accounting period' in the penultimate sentence should be to 'a new appointment'.)
There is additional guidance for both predecessor and successor auditors on the provision of access to information (including example letters to use).

Audit Regulation 3.13 - audit working papers

To help registered auditors with AR 3.13, we've produced some guidance on Audit Regulation 3.13.

PCAOB for non-US audit firms

Issues for audit firms outside the US that audit entities with a primary or secondary listing in the US, or a significant subsidiary thereof, and need to register with the PCAOB.

Changes in firm structure - please tell us within 10 business days

It’s important to maintain your firm record accurately. An inaccurate or out of date firm record may constitute a misdescription of your firm. It could also lead to regulatory or disciplinary action. This is particularly relevant for firms requiring registration for audit in Ireland where there are different ownership rules.

Auditor cessation statements

Our Technical Advisory Services helpsheets. are available to help ICAEW registered auditors with the notification requirements when an auditor ceases to hold office.

Model articles

The audit regulations require a registered auditor to be controlled in a certain way (see Chapter 2 of the Audit Regulations and Guidance).

If the registered auditor is a company, it's possible that persons other than the named shareholder may have interests in the company’s shares. This could mean the company is no longer controlled in accordance with the Audit Regulations.

Directors need the appropriate powers to call for information about interests in shares, and disenfranchise shares if necessary. This will ensure the registered auditor continues to be controlled in accordance with the Audit Regulations.

These model articles will help your firm include special provisions within its articles of association.