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Regulation (EU) No 537/2014 of the European Parliament and of the CouncilShow full title
Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities and repealing Commission Decision 2005/909/EC (Text with EEA relevance)
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Article 16U.K.Appointment of statutory auditors F1...
1.For the purposes of the application of [F2the provisions], for the appointment of statutory auditors F3... by public-interest entities, the conditions set out in [F4paragraph 3] of this Article shall apply, F5....
Where [F6the provisions for the appointment of statutory auditors by public interest entities do not apply], the public-interest entity shall inform the competent authority of the use of [F7applicable alternative systems] or modalities F8.... In that event, [F9paragraph 3] of this Article shall not apply.
F102.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.[F11The] recommendation of the audit committee F12... shall be prepared following a selection procedure organised by the audited entity respecting the following criteria:
[F13(a)the audited person is free to invite any persons who are eligible for appointment as statutory auditors to submit proposals for the provision of the statutory audit on the condition that—
(i)the maximum engagement periods in the provisions for the appointment of statutory auditors by public interest entities and the restrictions on appointments in those provisions are respected; and
(ii)that the organisation of the tender process does not in any way preclude the participation in the selection procedure of firms which received less than 15 % of the total audit fees from public-interest entities concerned in the previous calendar year;]
(b)the [F14audited person] shall prepare tender documents for the attention of the [F15invited persons]. Those tender documents shall allow them to understand the business of the [F14audited person] and the type of statutory audit that is to be carried out. The tender documents shall contain transparent and non-discriminatory selection criteria that shall be used by the [F14audited person] to evaluate the proposals made by statutory auditors F16...;
(c)the [F17audited person] shall be free to determine the selection procedure and may conduct direct negotiations with [F18applicants] in the course of the procedure;
(d)where, in accordance with [F19legislation of any part of the United Kingdom], the [F20competent authority][F21requires statutory auditors] to comply with certain quality standards, those standards shall be included in the tender documents;
(e)the [F22audited person] shall evaluate the proposals made by the [F23applicants] in accordance with the selection criteria predefined in the tender documents. The [F22audited person] shall prepare a report on the conclusions of the selection procedure, which shall be validated by the audit committee. The [F22audited person] and the audit committee shall take into consideration any findings or conclusions of any inspection report on the applicant F24... referred to in Article 26(8) and published by the competent authority pursuant to point (d) of Article 28;
(f)the [F25audited person] shall be able to demonstrate, upon request, to the competent authority F26... that the selection procedure was conducted in a fair manner.
The audit committee shall be responsible for the selection procedure referred to in the first subparagraph.
For the purposes of point (a) of the first subparagraph, the competent authority F27... shall make public a list of the [F28persons] concerned [F29who are eligible for appointment as statutory auditors] which shall be updated on an annual basis. The competent authority shall use the information provided by statutory auditors F30... pursuant to Article 14 to make the relevant calculations.
F314.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F315.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.Any clause of a contract entered into between a public-interest entity and a third party restricting the choice by the F32... members of that entity, F33... to certain categories or lists of [F34persons who are eligible for appointment as statutory auditor], as regards the appointment of a particular statutory auditor F35... to carry out the statutory audit of that entity shall be [F36of no effect].
The public-interest entity shall inform the [F37competent authority] directly and without delay of any attempt by a third party to impose such a contractual clause or to otherwise improperly influence the decision of the F38... members [F39of the public interest entity] on the selection of a statutory auditor F40....
F417.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F418.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textual Amendments
F1Words in Art. 16 heading omitted (11.5.2025) by virtue of The Companies (Directors' Remuneration and Audit) (Amendment) Regulations 2025 (S.I. 2025/439), regs. 1(2), 15(4)
F2Words in Art. 16(1) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(a)(i)(aa); 2020 c. 1, Sch. 5 para. 1(1)
F3Words in Art. 16(1) omitted (31.12.2020) by virtue of The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(a)(i)(bb); 2020 c. 1, Sch. 5 para. 1(1)
F4Words in Art. 16(1) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(a)(i)(cc); 2020 c. 1, Sch. 5 para. 1(1)
F5Words in Art. 16(1) omitted (31.12.2020) by virtue of The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(a)(i)(dd); 2020 c. 1, Sch. 5 para. 1(1)
F6Words in Art. 16(1) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(a)(ii)(aa); 2020 c. 1, Sch. 5 para. 1(1)
F7Words in Art. 16(1) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(a)(ii)(bb); 2020 c. 1, Sch. 5 para. 1(1)
F8Words in Art. 16(1) omitted (31.12.2020) by virtue of The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(a)(ii)(cc); 2020 c. 1, Sch. 5 para. 1(1)
F9Words in Art. 16(1) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(a)(ii)(dd); 2020 c. 1, Sch. 5 para. 1(1)
F10Art. 16(2) excepted from duty to publish (31.12.2020) by The Exception from the Duty to Publish (Department for Business and Trade) (No. 1) Direction 2023 (No. 1), Sch.
F11Word in Art. 16(3) substituted (11.5.2025) by The Companies (Directors' Remuneration and Audit) (Amendment) Regulations 2025 (S.I. 2025/439), regs. 1(2), 15(5)
F12Words in Art. 16(3) omitted (8.3.2021) by virtue of The European Grouping of Territorial Cooperation and Limited Liability Partnerships etc. (Revocations and Amendments) (EU Exit) Regulations 2021 (S.I. 2021/153), regs. 1, 19
F13Art. 16(3)(a) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(b)(iii); 2020 c. 1, Sch. 5 para. 1(1)
F14Words in Art. 16(3)(b) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(b)(iv)(aa); 2020 c. 1, Sch. 5 para. 1(1)
F15Words in Art. 16(3)(b) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(b)(iv)(bb); 2020 c. 1, Sch. 5 para. 1(1)
F16Words in Art. 16(3)(b) omitted (31.12.2020) by virtue of The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(b)(iv)(cc); 2020 c. 1, Sch. 5 para. 1(1)
F17Words in Art. 16(3)(c) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(b)(v)(aa); 2020 c. 1, Sch. 5 para. 1(1)
F18Word in Art. 16(3)(c) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(b)(v)(bb); 2020 c. 1, Sch. 5 para. 1(1)
F19Words in Art. 16(3)(d) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(b)(vi)(aa); 2020 c. 1, Sch. 5 para. 1(1)
F20Words in Art. 16(3)(d) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(b)(vi)(bb); 2020 c. 1, Sch. 5 para. 1(1)
F21Words in Art. 16(3)(d) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(b)(vi)(cc); 2020 c. 1, Sch. 5 para. 1(1)
F22Words in Art. 16(3)(e) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(b)(vii)(aa); 2020 c. 1, Sch. 5 para. 1(1)
F23Word in Art. 16(3)(e) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(b)(vii)(bb); 2020 c. 1, Sch. 5 para. 1(1)
F24Words in Art. 16(3)(e) omitted (31.12.2020) by virtue of The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(b)(vii)(cc); 2020 c. 1, Sch. 5 para. 1(1)
F25Words in Art. 16(3)(f) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(b)(viii)(aa); 2020 c. 1, Sch. 5 para. 1(1)
F26Words in Art. 16(3)(f) omitted (31.12.2020) by virtue of The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(b)(viii)(bb); 2020 c. 1, Sch. 5 para. 1(1)
F27Words in Art. 16(3) omitted (31.12.2020) by virtue of The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(c)(i); 2020 c. 1, Sch. 5 para. 1(1)
F28Word in Art. 16(3) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(c)(ii); 2020 c. 1, Sch. 5 para. 1(1)
F29Words in Art. 16(3) inserted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(c)(iii); 2020 c. 1, Sch. 5 para. 1(1)
F30Words in Art. 16(3) omitted (31.12.2020) by virtue of The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(c)(iv); 2020 c. 1, Sch. 5 para. 1(1)
F31Art. 16(4)(5) excepted from duty to publish (31.12.2020) by The Exception from the Duty to Publish (Department for Business and Trade) (No. 1) Direction 2023 (No. 1), Sch.
F32Words in Art. 16(6) omitted (31.12.2020) by virtue of The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(d)(i)(aa); 2020 c. 1, Sch. 5 para. 1(1)
F33Words in Art. 16(6) omitted (31.12.2020) by virtue of The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(d)(i)(bb); 2020 c. 1, Sch. 5 para. 1(1)
F34Words in Art. 16(6) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(d)(i)(cc); 2020 c. 1, Sch. 5 para. 1(1)
F35Words in Art. 16(6) omitted (31.12.2020) by virtue of The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(d)(i)(dd); 2020 c. 1, Sch. 5 para. 1(1)
F36Words in Art. 16(6) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(d)(i)(ee); 2020 c. 1, Sch. 5 para. 1(1)
F37Words in Art. 16(6) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(d)(ii)(aa); 2020 c. 1, Sch. 5 para. 1(1)
F38Words in Art. 16(6) omitted (31.12.2020) by virtue of The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(d)(ii)(bb); 2020 c. 1, Sch. 5 para. 1(1)
F39Words in Art. 16(6) inserted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(d)(ii)(cc); 2020 c. 1, Sch. 5 para. 1(1)
F40Words in Art. 16(6) omitted (31.12.2020) by virtue of The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(d)(ii)(dd); 2020 c. 1, Sch. 5 para. 1(1)
F41Art. 16(7)(8) omitted (31.12.2020) by virtue of The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 90(e); 2020 c. 1, Sch. 5 para. 1(1)
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