TITLE IIU.K. CONDITIONS FOR CARRYING OUT STATUTORY AUDIT OF PUBLIC INTEREST ENTITIES

Article 4U.K.Audit fees

1.F1...

F2... For the purposes of [F3paragraph 13 of Schedule 1 to the Statutory Auditor and Third Country Auditors Regulations 2016,] fees [F4“based on any form of contingency”] means fees for audit engagements calculated on a predetermined basis relating to the outcome or result of a transaction or the result of the work performed. Fees shall not be regarded as [F5being based on any form of contingency] if a court or [F6the competent authority] has established them.

2.When the statutory auditor F7... provides to the [F8audited person], its parent undertaking or its [F9subsidiary undertakings], for a period of three or more consecutive financial years, non-audit services other than those referred to in Article 5(1) of this Regulation, the total fees for such services shall be limited to no more than 70 % of the average of the fees paid in the last three consecutive financial years for the statutory audit(s) of the [F8audited person] and, where applicable, of its parent undertaking, of its [F9subsidiary undertakings] and of the consolidated [F10accounts] of that group of undertakings.

For the purposes of the limits specified in the first subparagraph, non-audit services, other than those referred to in Article 5(1), required by [F11legislation of any part of the United Kingdom] shall be excluded.

F12...

3.When the total fees received from a public-interest entity in each of the last three consecutive financial years are more than 15 % of the total fees received by the statutory auditor F13... in each of those financial years, such a statutory auditor F14... shall disclose that fact to the audit committee and discuss with the audit committee the threats to [F15its independence] and the safeguards applied to mitigate those threats. The audit committee shall consider whether the audit F16... should be subject to an engagement quality control review by another [F17person who is eligible for appointment as a statutory auditor] prior to the issuance of the audit report.

Where the fees received from such a public-interest entity continue to exceed 15 % of the total fees received by such a statutory auditor F18..., the audit committee shall decide on the basis of objective grounds whether the statutory auditor [F19of the public interest entity] may continue to carry out the statutory audit for an additional period which shall not, in any case, exceed two years.

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Textual Amendments