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 5U.K.Prohibition of the provision of non-audit services

1.A statutory auditor F1... carrying out the statutory audit of a public-interest entity, or any member of the network to which the statutory auditor F2... belongs, shall not directly or indirectly provide to the [F3audited person], to its parent undertaking [F4(incorporated or formed in any part of the United Kingdom)] or to its [F5subsidiary undertakings]F6... any prohibited non-audit services in:

(a)the period between the beginning of the [F7financial year of the accounts to be audited] and the issuing of the audit report; and

[X1(b)the financial year immediately preceding [F8that period] in relation to the services listed in point (e) of the second subparagraph.]

For the purposes of this Article, prohibited non-audit services shall mean:

(a)tax services relating to:

(i)

preparation of tax forms;

(ii)

payroll tax;

(iii)

customs duties;

(iv)

identification of public subsidies and tax incentives unless support from the statutory auditor F9... in respect of such services is required by law;

(v)

support regarding tax inspections by tax authorities unless support from the statutory auditor F10... in respect of such inspections is required by law;

(vi)

calculation of direct and indirect tax and deferred tax;

(vii)

provision of tax advice;

(b)services that involve playing any part in the management or decision-making of the [F11audited person];

(c)bookkeeping and preparing accounting records and [F12accounts];

(d)payroll services;

(e)designing and implementing internal control or risk management procedures related to the preparation and/or control of financial information or designing and implementing financial information technology systems;

(f)valuation services, including valuations performed in connection with actuarial services or litigation support services;

(g)legal services, with respect to:

(i)

the provision of general counsel;

(ii)

negotiating on behalf of the [F13audited person]; and

(iii)

acting in an advocacy role in the resolution of litigation;

(h)services related to the [F14audited person's] internal audit function;

(i)services linked to the financing, capital structure and allocation, and investment strategy of the [F15audited person], except providing assurance services in relation to the [F16accounts], such as the issuing of comfort letters in connection with prospectuses issued by the audited entity;

(j)promoting, dealing in, or underwriting shares in the [F17audited person];

(k)human resources services, with respect to:

(i)

management in a position to exert significant influence over the preparation of the accounting records or [F18the accounts] which are the subject of the statutory audit, where such services involve:

searching for or seeking out candidates for such position; or
undertaking reference checks of candidates for such positions;

(ii)

structuring the organisation design; and

(iii)

cost control.

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4.A statutory auditor F21... carrying out statutory audits of public-interest entities and, where the statutory auditor F22... belongs to a network, any member of such network, may provide to the [F23audited person], to its parent undertaking [F24(incorporated or formed in any part of the United Kingdom)] or to its [F25subsidiary undertakings] non-audit services other than the prohibited non-audit services referred to in paragraphs 1 and 2 subject to the approval of the audit committee after it has properly assessed threats to independence and the safeguards applied in accordance with [F26paragraph 8 of Schedule 1 to the Statutory Auditors and Third Country Auditors Regulations 2016]. F27...