Companies (Jersey) Law 1991: Discretionary Authorisation of Auditors of Companies that are not Market Traded Companies

Summary

This is a JFSC policy statement explaining when the Commission will use its discretion under Article 113D(6) of the Companies (Jersey) Law 1991 to authorise an auditor who does not meet the standard qualification criteria in Article 102 to audit a Jersey company that is not a market traded or equivalently regulated company. It sets out the criteria the JFSC applies, the application process, and possible conditions on any authorisation granted.

• Who needs this: Individual auditors, partnerships or bodies corporate who wish to audit a non market traded Jersey company but do not meet the standard qualification requirement of membership of a recognised UK/Ireland accountancy body or an EEA equivalent qualification
• When JFSC will ordinarily authorise: Where the auditor is approved under an EEA member state's implementation of the EU Statutory Audit Directive, or registered with a competent authority of a G7 country or an EU Equivalent Jurisdiction, or is a member of Deloitte, EY, KPMG or PwC, and the Responsible Individual is conversant with the relevant GAAP, GAAS and Jersey regulatory requirements
• Grounds for refusal despite meeting criteria: JFSC may still refuse if authorisation would likely harm public protection against auditor misconduct, Jersey's reputation, Jersey's economic interests, or efforts to counter financial crime
• Conditions on authorisation: JFSC can name the specific individual within a firm permitted to sign audit reports and can require confirmation of compliance with the Jersey guidance requirement
• Appeals: A refusal, or the imposition of conditions or limitations, can be appealed to the Royal Court on the ground that the JFSC's decision was unreasonable

The policy does not change the underlying law but clarifies how the JFSC exercises its discretion, and imposes procedural obligations on applicants and authorised firms around evidence, guidance-seeking and confirmations to the JFSC.

Key obligations

• An auditor who does not meet the standard Article 102 qualification criteria must apply to the JFSC under Article 113D(6) for discretionary authorisation before auditing a non market traded Jersey company
• Applications must be made using the JFSC's published application form
• Where relying on EEA approval or G7/EU Equivalent Jurisdiction registration, the application must be accompanied by evidence of that approval or registration
• The Responsible Individual who will sign the audit report must, prior to signing, request guidance from a Jersey based qualified auditor on relevant Jersey statutory and regulatory requirements and have due regard to that guidance
• Where an audit firm's authorisation is so conditioned, the firm must provide the JFSC, in confidence, written confirmation as soon as practicable after signing the audit report that the Responsible Individual had due regard to the Jersey based auditor's guidance
• Authorised firms must ensure only the named individual approved by the JFSC as the Responsible Individual signs the audit report

Applies to

auditors of Jersey companies that are not market traded companies, audit firms and partnerships seeking authorisation to audit non market traded Jersey companies, Responsible Individuals signing audit reports on behalf of authorised auditors

Deadlines

• as soon as practicable after the signing of the audit report: Authorised audit firms must provide the JFSC with written confirmation that the Responsible Individual had due regard to guidance from a Jersey based auditor
• prior to signing an audit report: The Responsible Individual must request guidance from a Jersey based qualified auditor on Jersey statutory and regulatory requirements applicable to the company