# 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), Article 4: Audit fees

Extent: E+W+S+N.I.

1. ...
... For the purposes of paragraph 13 of Schedule 1 to the Statutory Auditor and Third Country Auditors Regulations 2016, fees “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 being based on any form of contingency if a court or the competent authority has established them.
2. When the statutory auditor ... provides to the audited person, its parent undertaking or its subsidiary 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 audited person and, where applicable, of its parent undertaking, of its subsidiary undertakings and of the consolidated accounts 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 legislation of any part of the United Kingdom shall be excluded.
...
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 ... in each of those financial years, such a statutory auditor ... shall disclose that fact to the audit committee and discuss with the audit committee the threats to its independence and the safeguards applied to mitigate those threats. The audit committee shall consider whether the audit ... should be subject to an engagement quality control review by another person 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 ..., the audit committee shall decide on the basis of objective grounds whether the statutory auditor of 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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Source: https://www.legislation.gov.uk/eur/2014/537/article/4 (the official version)
Page: https://openlegislation.uk/eu-regulation-2014-537/article-4
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.