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Government releases no-deal Brexit guidance for EEA auditors and audit firms in the UK

The government has released post-Brexit guidance for firms with statutory auditors on their books who are registered in Europe rather than the UK. For most UK firms, no action is required but for others, there may be a requirement to change the composition of their practice.

7th Oct 2019
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UK and EU flags being cut

On 27 September, the government published what will presumably be its final version of guidance regarding the regulations that will apply to European Economic Area (EEA) auditors and firms in the event of a no-deal Brexit on 31 October.

Helpfully, as the subtitle suggests, this should comprehensively deal with any questions that readers might have since it is designed to cover “what EEA audit firms, EEA auditors, and those with EEA qualifications need to do.”

The document starts in controversial fashion with the bold statement “The UK will leave the EU on 31 October”. That seems less than certain at present.

It is also worth noting that there is separate advice for UK auditors and audit firms, which is not covered in this guidance.

Statutory auditors

Anyone already registered as a statutory auditor with a UK-recognised professional body will be comforted to learn that they need to take no further action.

Others who wish to operate as statutory auditors in the UK will be obliged to register in this country by 31 December 2020 if they wish to work here and sign audit reports based on their EEA qualifications.

To do so, they can register with any of the UK’s recognised supervisory bodies. These are:

  1. Association of Chartered Certified Accountants (ACCA)
  2. Chartered Accountants Ireland (CAI)
  3. Institute of Chartered Accountants In England And Wales (ICAEW)
  4. Institute of Chartered Accountants in Scotland (ICAS).

Those that are already registered in the Republic of Ireland will not need to re-register in the UK but, if they are qualified as a member of CPA Ireland, will be obliged to take (and presumably pass) an aptitude test.

Ownership of EEA audit firms

In some cases, there may be an obligation to restructure audit practices. Where an EEA-approved firm has a majority of qualified owners and managers that includes UK audit firms or people with UK audit qualifications, they will need to check with the competent authority where the firm is recognised. This will determine whether there will be a requirement to change the composition of the practice in order to fit in with that authority’s guidelines.

Ownership of UK audit firms

EEA auditors will still be able to count when determining a UK firm’s required majorities of qualified owners and managers.

EEA audit firms can also be included but only until 31 December 2020. After that date, EEA audit firms can only be included if they are both:

  • based in the Republic of Ireland; and
  • registered with one of the UK’s four recognised supervisory bodies referred to above.


Most UK auditors may have no need to concern themselves about the changes referred to in this guidance.

First, it is currently only going to be of relevance if the country leaves the European Union without any kind of deal on the last day of this month. If there is a deal between the UK and the EU prior to a departure, we must all hope that it includes provisions that it obviates the need for these potentially disruptive proposals.

Secondly, only practices that have statutory auditors on their books who are registered in Europe rather than the UK will be affected, along with those that have an element of overseas ownership or own practices beyond our borders but within the EEA.

Going a step further, even if there is the cliff edge exit, most of the requirements will not come into play for over a year.

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