Companies (Jersey) Law 1991: Recognised Auditors

Summary

This JFSC guidance page explains Jersey's recognised auditor regime under the Companies (Jersey) Law 1991, which applies to auditors of 'market traded companies' (MTCs) whose securities trade on a UK or EU/EFTA regulated market. It summarises the criteria for becoming a recognised auditor, the application process, ongoing statutory obligations, and the oversight roles of the JFSC, ICAEW and FRC.

• Who must use a recognised auditor: A market traded company appointing an auditor under Article 113(1) must appoint an auditor who is a 'recognised auditor' entered on the Register of Recognised Auditors maintained by the JFSC.
• Qualification criteria: To become a recognised auditor, a firm or individual must satisfy the 'auditor' definition in Article 102 (membership of a recognised professional body permitted to engage in public practice), be bound by the Crown Dependencies Audit Rules (CDAR), and make a successful application to the JFSC with the published fee.
• Application process: Applications are made to the JFSC's Authorisations Division; the JFSC may refuse an application if not satisfied the auditor is competent, and may impose conditions or limitations on registration.
• Ongoing notification duty: A recognised auditor must notify the JFSC of any material change to information previously supplied, including changes to the list of MTCs it audits, and must separately notify the ICAEW of such changes under CDAR rule 2.09.1.
• Annual confirmation: A recognised auditor must provide the JFSC with written confirmation that its register entry remains correct, as required by Article 4 of the Companies (Audit) (Jersey) Order 2010.
• Oversight structure: The ICAEW acts as the monitoring unit for Jersey MTC auditors and enforces the CDAR; the FRC oversees the ICAEW and directly monitors audits of major MTCs; breaches of CDAR can lead to disciplinary action and may be grounds for the JFSC to suspend or revoke registration.
• Discretionary authorisation: The JFSC may grant discretionary authorisation to audit firms auditing non-MTC Jersey companies, though these firms are not subject to the JFSC's oversight, monitoring or inspection regime.

Failure to notify the JFSC of a material change within one month, or failure to provide the required written confirmation of register accuracy, constitutes a criminal offence for the auditor and any officer in default.

Key obligations

• A market traded company must appoint an auditor who is a recognised auditor on the JFSC's Register of Recognised Auditors (Article 113(2))
• An auditor seeking recognition must satisfy the Article 102 'auditor' definition, be bound by the Crown Dependencies Audit Rules (CDAR), and successfully apply to the JFSC with the published fee
• A recognised auditor must notify the JFSC of any material change to information it has supplied, as soon as practicable and in any event within one month of the change, or commit a criminal offence (Article 111(16))
• A recognised auditor must notify the ICAEW of any changes to the list of MTCs it audits (CDAR rule 2.09.1)
• A recognised auditor must provide the JFSC with written confirmation that its register entry remains correct, or commit a criminal offence (Article 4, Companies (Audit) (Jersey) Order 2010)
• A recognised auditor must continue to comply with the CDAR on an ongoing basis (CDAR rule 2.06)

Applies to

recognised auditors, applicants to be recognised auditors, market traded companies (MTCs), audit firms seeking discretionary authorisation

Deadlines

• within one month of the material change: Recognised auditor must notify the JFSC of any material change to information previously supplied under Article 111(16)