Article 26 Quality assurance

‘inspections’ means quality assurance reviews of statutory auditors F1..., which are led by an inspector and which do not constitute an investigation within the meaning of F2regulation 3(1)(l) of the Statutory Auditors and Third Country Auditors Regulations 2016;

‘inspector’ means F3an individual who meets the requirements set out in point (a) of the first subparagraph of paragraph 5 of this Article and who is employed or otherwise contracted by a competent authority;

‘expert’ means F4an individual who has specific expertise in financial markets, F5accounting, auditing or other fields relevant for inspections, including practising statutory auditors.

in the case of statutory auditors carrying out audits of public interest entities, other than those which, but for being public interest entities, would qualify (or would if they were companies) as small or medium-sized under sections 382 and 383 or sections 465 and 467 of the Companies Act 2006, at least every three years; and

in cases other than those referred to in point (a), at least every six years.

approval and amendment of the inspection methodologies, including inspection and follow-up manuals, reporting methodologies and periodic inspection programmes;

approval and amendment of inspection reports and follow-up reports;

approval and assignment of inspectors for each inspection.

inspectors shall have appropriate professional education and relevant experience in statutory audit and F11accounting combined with specific training on quality assurance reviews;

a person who is a practising statutory auditor or is employed by or otherwise associated with a statutory auditor F12... shall not be allowed to act as an inspector;

a person shall not be allowed to act as an inspector in an inspection of a statutory auditor F13... until at least three years have elapsed since that person ceased to be a partner or employee of that statutory auditor F14... or to be otherwise associated with that statutory auditor F15...;

inspectors shall declare that there are no conflicts of interest between them and the statutory auditor F16... to be inspected.

statutory audit work;

equivalent work, for the purposes of an appointment of a person to conduct inspections made prior to IP completion day, on the audit of accounts under the law of an EEA State, or part of an EEA State, or Gibraltar; or

equivalent work, for the purposes of an appointment of a person to conduct inspections, on the audit of accounts under the law of—

an assessment of the design of the internal quality control system of the statutory auditor F20...;

adequate compliance testing of procedures and a review of audit files of public-interest entities in order to verify the effectiveness of the internal quality control system;

in the light of the findings of the inspection under points (a) and (b) of this paragraph, an assessment of the contents of the most recent annual transparency report published by a statutory auditor F21... in accordance with Article 13.

compliance by the statutory auditor F23... with applicable auditing and quality control standards, and ethical and independence requirements, including F24the relevant standards listed in regulation 4(2) of the Statutory Auditors and Third Country Auditors Regulations 2016 and Articles 4 and 5 of this Regulation F25...;

the quantity and quality of resources used, including compliance with continuing education requirements as set out in F26paragraph 11 of Schedule 10 to the Companies Act 2006;

compliance with the requirements set out in Article 4 of this Regulation on the audit fees charged.