{"id":"circulars/faq-faq-application-form-third-country-auditors-and-audit-entities","title":"FAQ “Application form – Third country auditors and audit entities”","type":"circular","date":"2020-10-23","kind":"faq","html":"

FAQ “Application form – Third country auditors and audit entities” is a CSSF FAQ, published 23 October 2020.

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Relevant for: Public Oversight of the Audit Profession.

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Keywords: Audit firm.

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Text

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Frequently Asked Questions Application Form (LU) for registration of third-country auditors and audit entities INTRODUCTION Annex to the Application Form (LU) for registration of third-country auditors and audit entities according to Article 45 of the amended Directive 2006/43/EC of 17 May 2006 on Statutory Audits of Annual Accounts and Consolidated Accounts and the law of 23 July 2016 concerning the audit profession.

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Registration

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  1. Why do third-country audit entities have to register with authorities in Member States?
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The European Statutory Audit Directive 2006/43/EC (the “Audit Directive”) as amended by the Directive 2014/56/EU sets minimum regulatory requirements for statutory audits across the European Union/European Economic Area (“EU/EEA”). The interrelation of capital markets underlines the need to ensure that auditors from third countries carry out high quality audit work in relation to capital markets within the EU/EEA. The Audit Directive therefore requires that the relevant statutory audit entities and auditors from third countries be entered in a public register and be subject to a level of regulation equivalent to the minimum required for EU/EEA auditors. The European Commission has declared a number of third countries as “equivalent” and has also made transitional measures to facilitate the introduction of these requirements. Registration is required according to Article 45 of the Audit Directive if a third-country audit entity provides an audit report concerning the annual or consolidated accounts of a relevant audit client (see FAQ no. 3.).

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  1. Which auditors have to register as third-country audit entity in Luxembourg?
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According to Article 2(4) of the Audit Directive a ‘third-country audit entity’ means an entity, regardless of its legal form, which carries out audits of the annual or consolidated financial statements of a relevant audit client (see FAQ no. 3.), other than an entity which is registered as an audit firm in any Member State as a consequence of approval in accordance with Article 3 of the Audit Directive.

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  1. What is a “relevant audit client” (Item 12.0)? A relevant audit client is a company incorporated outside the EU/EEA whose transferable securities are admitted to trading on the regulated market in Luxembourg (“Bourse de Luxembourg”) within the meaning of point 14 of Article 4(1) of Directive 2004/39/EC, except when the company in question is an issuer exclusively of outstanding debt securities for which one of the following applies: •
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they have been admitted to trading on the regulated market in Luxembourg within the meaning of point (c) of Article 2(1) of Directive 2004/109/EC prior to 31 December 2010 and the denomination per unit of which is, at the date of issue, at least EUR 50 000 or, in the case of debt securities denominated in another currency, equivalent, at the date of issue, to at least EUR 50 000;

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they are admitted to trading on the regulated market in Luxembourg within the meaning of point (c) of Article 2(1) of Directive 2004/109/EC from 31 December 2010 and the denomination per unit of which is, at the date of issue, at least EUR 100 000 or, in case of debt securities denominated in another currency, equivalent, at the date of issue, to at least EUR 100 000.

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The applicant should submit applications in each Member State where the audit client's securities are admitted to trading on a regulated market.

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  1. Does registration entitle third-country audit entities to provide statutory audit services in the EU/EEA? No. In accordance with national legislation, registration as a third-country audit entity in Luxembourg does not give approval to carry out statutory audits as required by Community law (see Article 2(1) of the Audit Directive). Such a registration only allows the latter to provide an audit opinion of a third-country entity having securities admitted to trading on the Luxembourg regulated market.
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The text above is the opening of the document; the PDF carries the whole.

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Document page, PDF. Source: Commission de Surveillance du Secteur Financier (CSSF), reproduced with the CSSF's consent. The French text prevails.

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