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The UK will leave the EU on 31 October. This page tells you how to prepare for Brexit. It will be updated if anything changes, including if a deal is agreed.
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The rules for auditing UK companies operating solely in the UK will not change after the UK leaves the EU.
UK companies operating in European Economic Area (EEA) countries will need to meet regulations in those countries.
Recognition of UK audit qualifications in EEA countries
You should check if your UK qualification will continue to be recognised after the UK leaves the EU. Contact the competent authority in the country where you sign audit reports.
If an EEA country does not recognise your UK qualification, you may need to:
- take a new aptitude test – tests taken before the day the UK leaves the EU may not continue to be recognised
- complete a new adaptation period
- re-qualify for a recognised qualification
UK audit firms auditing EEA companies
You may not be able to sign an audit report for an EEA company after the day the UK leaves the EU.
You’ll need to check with the competent authority in the country where the company is incorporated:
- if your audit qualification is recognised
- what steps you need to take for your audit opinion to be valid
You may need to resign as auditor if your audit opinion will not be valid.
Third country auditors of non-EEA firms listed on EEA regulated markets
To carry out these audits you should register with the competent authority of the EEA state where the market is based.
Businesses treated as public interest entities
Banks, building societies, insurers and issuers of securities that trade on UK regulated markets will be treated as public interest entities and must follow the EU Audit Regulation after the UK leaves the EU.
Your business will no longer be treated as a public interest entity in the UK if it only issues securities that are admitted to trade on EEA regulated markets.
Auditing groups of companies
You do not need to do anything if you audit a group of companies across the EEA and the UK if your parent company is based in the UK.
Restrictions on subsidiary companies in the EEA
Check with the competent authority in the country where your subsidiary is incorporated if there are any restrictions – for example, sharing information outside the EEA.
Blacklisted non-audit services
Non-audit services will be blacklisted for all overseas subsidiaries of UK public interest entities from the day the UK leaves the EU.
- non-audit services will be prohibited if provided by the auditor of a UK public interest entity
- firms in the same network as a UK auditor of a UK public interest entity will be prohibited from providing blacklisted services to non-EEA subsidiaries
Disclosure and Transparency Rules on Audit Committees
UK issuers of shares or debt securities that are only admitted to trading on EEA regulated markets will no longer be subject to the Disclosure and Transparency Rules issued by the Financial Conduct Authority (FCA) after the UK leaves the EU.
All other UK public interest entities will still be subject to the Disclosure and Transparency Rules issued by the FCA and relevant rules issued by the Prudential Regulation Authority (PRA).
Exemptions for subsidiaries
The exemptions in these rules will continue to apply to subsidiaries as long as the parent company is incorporated in the UK.
For subsidiaries that issue securities on UK regulated markets, the parent company can be subject to either the FCA or the PRA rules.
Banks or insurers that qualify for PRA exemptions only, must have a parent company that is subject to the PRA rules.
Ownership of UK audit firms
You can continue to include EEA auditors in your UK firm’s required majorities of qualified owners and managers after the UK leaves the EU.
You can also include EEA audit firms until 31 December 2020.
After 31 December 2020, you can continue to include EEA audit firms if they’re both:
Ownership of EEA audit firms
As a UK auditor or UK audit firm you may not be allowed to continue in an EEA firm’s required majorities of qualified owners and managers after the UK leaves the EU.
You’ll need to check with the competent authority where the firm is recognised.