{
  "url": "https://openlegislation.uk/eu-regulation-2014-537/article-26",
  "json_url": "https://openlegislation.uk/eu-regulation-2014-537/article-26.json",
  "legislation": "eur/2014/537",
  "legislation_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)",
  "legislation_url": "https://openlegislation.uk/eu-regulation-2014-537",
  "path": "article/26",
  "kind": "article",
  "number": "26",
  "heading": "Quality assurance",
  "text": "1. For the purposes of this Article:\n(a) ‘inspections’ means quality assurance reviews of statutory auditors ..., which are led by an inspector and which do not constitute an investigation within the meaning of regulation 3(1)(l) of the Statutory Auditors and Third Country Auditors Regulations 2016;\n(b) ‘inspector’ means an 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;\n(c) ‘expert’ means an individual who has specific expertise in financial markets, accounting, auditing or other fields relevant for inspections, including practising statutory auditors.\n2. The competent authority shall establish an effective system of audit quality assurance.\nThey shall carry out quality assurance reviews of individuals and firms that carry out statutory audits of public-interest entities on the basis of an analysis of the risk and:\n(a) 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\n(b) in cases other than those referred to in point (a), at least every six years.\n3. The competent authority shall have the following responsibilities:\n(a) approval and amendment of the inspection methodologies, including inspection and follow-up manuals, reporting methodologies and periodic inspection programmes;\n(b) approval and amendment of inspection reports and follow-up reports;\n(c) approval and assignment of inspectors for each inspection.\nThe competent authority shall allocate adequate resources to the quality assurance system.\n4. The competent authority shall organise the quality assurance system in a manner that is independent of the ... statutory auditors that are the subject of the inspection.\nThe competent authority shall ensure that appropriate policies and procedures related to the independence and objectivity of the staff, including inspectors, and the management of the quality assurance system are put in place.\n5. The competent authority shall comply with the following criteria when appointing inspectors:\n(a) inspectors shall have appropriate professional education and relevant experience in statutory audit and accounting combined with specific training on quality assurance reviews;\n(b) a person who is a practising statutory auditor or is employed by or otherwise associated with a statutory auditor ... shall not be allowed to act as an inspector;\n(c) a person shall not be allowed to act as an inspector in an inspection of a statutory auditor ... until at least three years have elapsed since that person ceased to be a partner or employee of that statutory auditor ... or to be otherwise associated with that statutory auditor ...;\n(d) inspectors shall declare that there are no conflicts of interest between them and the statutory auditor ... to be inspected.\nBy way of derogation from point (b) of paragraph 1, the competent authority may contract experts for carrying out specific inspections when the number of inspectors within the authority is insufficient. The competent authority may also be assisted by experts when this is essential for the proper conduct of an inspection. In such instances, the competent authority and the experts shall comply with the requirements of this paragraph. Experts shall not be involved in the governance of, or employed or otherwise contracted by professional associations and bodies but may be members of such associations or bodies.\n(5A.) In point (a) of the first subparagraph of paragraph (5), “relevant experience” means having experience of—\na) statutory audit work;\nb) 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\nc) equivalent work, for the purposes of an appointment of a person to conduct inspections, on the audit of accounts under the law of—\ni) an equivalent third country, or part of an equivalent third country; or\nii) a transitional third country, or part of a transitional third country.\n6. The scope of inspections shall at least cover:\n(a) an assessment of the design of the internal quality control system of the statutory auditor ...;\n(b) 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;\n(c) 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 ... in accordance with Article 13.\n7. At least the following internal quality control policies and procedures of the statutory auditor ... shall be reviewed:\n(a) compliance by the statutory auditor ... with applicable auditing and quality control standards, and ethical and independence requirements, including the 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 ...;\n(b) the quantity and quality of resources used, including compliance with continuing education requirements as set out in paragraph 11 of Schedule 10 to the Companies Act 2006;\n(c) compliance with the requirements set out in Article 4 of this Regulation on the audit fees charged.\nFor the purposes of testing compliance, audit files shall be selected on the basis of an analysis of the risk of a failure to carry out a statutory audit adequately.\nThe competent authority shall also periodically review the methodologies used by statutory auditors ... to carry out statutory audits.\nIn addition to the inspection covered by the first subparagraph, the competent authority shall have the power to perform other inspections.\n8. The findings and conclusions of inspections on which recommendations are based, including the findings and conclusions related to a transparency report, shall be communicated to and discussed with the inspected statutory auditor ... before an inspection report is finalised.\nRecommendations of inspections shall be implemented by the inspected statutory auditor ... within a reasonable period set by the competent authority. Such period shall not exceed 12 months in the case of recommendations on the internal quality control system of the statutory auditor ....\n9. The inspection shall be the subject of a report which shall contain the main conclusions and recommendations of the quality assurance review.",
  "extent": "E+W+S+N.I.",
  "status": null,
  "version": "current",
  "annotations": [
    {
      "type": "F",
      "label": "F1",
      "text": "Words in Art. 26(1)(a) 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, 100(a)(i)(aa); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F2",
      "text": "Words in Art. 26(1)(a) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 100(a)(i)(bb); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F3",
      "text": "Words in Art. 26(1)(b) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 100(a)(ii); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F4",
      "text": "Words in Art. 26(1)(c) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 100(a)(iii)(aa); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F5",
      "text": "Word in Art. 26(1)(c) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 100(a)(iii)(bb); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F6",
      "text": "Words in Art. 26(2) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 100(b)(i); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F7",
      "text": "Words in Art. 26(2) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 100(b)(ii)(aa); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F8",
      "text": "Art. 26(2)(a) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 100(b)(ii)(bb) (as amended by S.I. 2019/1392, regs. 1(2), 8); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F9",
      "text": "Word in Art. 26(4) 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, 100(c)(i); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F10",
      "text": "Words in Art. 26(4) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 100(c)(ii); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F11",
      "text": "Word in Art. 26(5)(a) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 100(d)(i); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F12",
      "text": "Words in Art. 26(5)(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, 100(d)(ii); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F13",
      "text": "Words in Art. 26(5)(c) 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, 100(d)(iii)(aa); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F14",
      "text": "Words in Art. 26(5)(c) 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, 100(d)(iii)(bb); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F15",
      "text": "Words in Art. 26(5)(c) 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, 100(d)(iii)(cc); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F16",
      "text": "Words in Art. 26(5)(d) 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, 100(d)(iv); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F17",
      "text": "Words in Art. 26(5) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 100(e)(i); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F18",
      "text": "Words in Art. 26(5) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 100(e)(ii); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F19",
      "text": "Art. 26(5A) inserted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 100(f) (as amended by S.I. 2020/523, regs. 1(2), 16); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F20",
      "text": "Words in Art. 26(6)(a) 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, 100(g)(i); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F21",
      "text": "Words in Art. 26(6)(c) 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, 100(g)(ii); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F22",
      "text": "Words in Art. 26(7) 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, 100(h)(i); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F23",
      "text": "Words in Art. 26(7)(a) 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, 100(h)(ii)(aa); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F24",
      "text": "Words in Art. 26(7)(a) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 100(h)(ii)(bb); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F25",
      "text": "Words in Art. 26(7)(a) 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, 100(h)(ii)(cc); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F26",
      "text": "Words in Art. 26(7)(b) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 100(h)(iii); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F27",
      "text": "Words in Art. 26(7) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 100(i)(i); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F28",
      "text": "Words in Art. 26(7) 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, 100(i)(ii); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F29",
      "text": "Words in Art. 26(7) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 100(j); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F30",
      "text": "Words in Art. 26(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, 100(k)(i); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F31",
      "text": "Words in Art. 26(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, 100(k)(ii)(aa); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "F",
      "label": "F32",
      "text": "Words in Art. 26(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, 100(k)(ii)(bb); 2020 c. 1, Sch. 5 para. 1(1)"
    }
  ],
  "outstanding_effects": [],
  "provenance": {
    "source": "legislation.gov.uk",
    "source_url": "https://www.legislation.gov.uk/eur/2014/537/article/26",
    "retrieved_at": "2026-11-01T14:47:39.197860+00:00"
  },
  "licence": "Open Government Licence v3.0",
  "licence_url": "https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/",
  "attribution": "Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives."
}