Auditors Professional Oversight Third Country Auditors

Third Country Auditors

Third country auditors are non-EUauditors of certain companies incorporated outside of the EU and listed on EU-regulated markets. Further detail on which companies fall under this definition can be found on the Regulatory Background page.

In 2006 the EU implemented a system of regulation for third country auditors, which became effective in the UK in 2008. The system requires auditors of companies listed on EU-regulated markets to be subject to certain regulatory requirements, regardless of where the company, or auditor, is located. It is intended to enhance and safeguard public confidence in the financial statements of EU-traded companies audited by third country auditors.

Third country auditors are required to register with the Competent Authority of the EU Member State in which such companies are listed. In the UK, this is the FRC.

Further information, including the UK Register of Third Country Auditors, can be accessed below.

Under the European Union (Withdrawal) Act 2018 the UK will leave the European Union. Under the terms of the proposed withdrawal agreement, an implementation period will then apply until the end of December 2020 in which the UK and the EU Member States, and where applicable the other EEA States, will treat one another on the same basis as now while arrangements are put in place for the UK’s full exit from the EU on the basis of a future economic partnership.  The details of those arrangements will need to be agreed and ratified in the period up to the end of 2020.

In the unlikely event that the UK leaves the EU without a withdrawal agreement, the UK will immediately become a third country for audit purposes under the audit regulatory framework in the EEA States, and EEA States will be treated as third countries under the UK audit regulatory framework. For company financial years beginning on or after the date the UK exits the EU, all relevant companies incorporated in the EEA and listed on a UK regulated market will be required to appoint a registered Third Country Auditor or another firm which is eligible for appointment as a statutory auditor in the UK.

The FRC is working with the UK government to establish the appropriate systems for the registration of EEA auditors as third country auditors. These systems are being prepared so as to be fully operable when the UK exists the EU if needed, although EEA auditors will also be able to take steps to prepare in advance. More information will be provided in due course.

If you have queries relating to third country auditors, please email us at or call Siân Burgess on 020 7492 2354.

1 For the purposes of the third country auditor regime, the EU includes all states within the European Economic Area (EEA).