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Non-EU audit requirements

1 Dec 08

The Professional Oversight Board (POB) has published requirements to give effect in the UK to European rules for regulation of auditors of companies from outside Europe that have issued securities on regulated markets within the EU. The requirements derive from the Statutory Audit Directive

POB estimates that in the UK there are some 570 such issuers from 50 countries audited by about 150 third-country audit firms.

The forms and guidance to be used reflect the European Commission decision published in July setting out transitional arrangements for audit firms from specified countries in respect of the audits of accounts for periods starting between 29 June 2008 and 1 July 2010. They are exempt from most regulatory requirements, reducing substantially their obligations under the directive.

The UK forms and guidance mainly follow a format agreed by member states; and reflect points made in response to the UK consultation earlier this year, while meeting UK statutory requirements.

Paul George, director of the POB said: “Whilst a third country audit firm cannot rely on a single registration for the entire EU, the common arrangements should reduce significantly the burden of making multiple applications.

“We are also keen that audit regulators around the world should, where equivalent systems exist, rely on one another’s work to the maximum extent possible. We are therefore pleased that the European Commission introduced transitional measures for those countries that, on a preliminary assessment, either have well developed audit regulation or plans to introduce it.”

Page No: 103

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