Registration of third country auditors in the Czech Republic
The Directive on Statutory Audit 2006/43/EC ('the Audit Directive'), adopted by the European Union on 17 May 2006, which was transposed into the national law of the Czech Republic by the Act on Auditors, effective in the Czech Republic from 14 April 2009, includes specific provisions on the regulation of the auditors of non-EU1) companies that have issued securities admitted to trading on EU regulated markets ('third country audit entities').
Article 45 of the Audit Directive (Article 47 of the Czech Act on Auditors) sets out regulatory requirements for the registration of third country audit entities, for continuing oversight including the external monitoring of the quality of their audit work, and for investigations and sanctions.
Article 46 of the Audit Directive (Article 48 of the Czech Act on Auditors) allows Member States to derogate from these requirements where the third country audit entity is subject to a system of public oversight, inspections and investigations which the European Commission has recognised as equivalent, or where the third country audit entity is within transitional arrangements adopted by the European Commission.
Deciding on equivalence is a matter for the European Commission and Member States. By the Commission Decision 2011/30/EU of 19 January 2011, the public oversight, quality assurance, investigation and penalty systems for auditors in the following third countries are considered equivalent to Member States in relation to audits for financial years starting from 2 July 2010: Australia, Canada, China, Croatia, Japan, Singapore, South Africa, South Korea, Switzerland and USA (limited only until 31 July 2013).
In addition, the Commission Decision 2008/627/EC of 29 July 2008 exempted for a transitional period (financial years starting between 29 June 2008 and 1 July 2010) certain third country audit entities2) from the requirements of Article 45 of the Audit Directive, on the condition that they provide relevant Member States with specific information. The Commission Decision 2011/30/EU of 19 January 2011 provided an amended list of third countries3) for a subsequent transitional period (financial years starting between 2 July 2010 and 31 July 2012) under similar conditions.
EU auditor oversight bodies, with the support of the European Commission, recognise the importance of putting in place practical arrangements for third country audit firms that are not over-burdensome and reflect as far as possible a common approach across the EU. To this end, the members of the European Group of Auditors' Oversight Bodies (EGAOB) have worked together with the objective that third country audit entities will be able to use application forms and guidance material that is as similar as national regulatory systems permit. Therefore, the application forms and guidance material for registration in the Czech Republic follow as closely as possible the common material agreed amongst Member states within the EGAOB. A third country audit entity that needs to register in more than one Member State will still have to apply separately for each registration but the form of application should in most respects be similar.
Who must register with the Czech Chamber of Auditors?
An audit entity must register with the Chamber of Auditors of the Czech Republic if it audits the annual or consolidated accounts of a company incorporated outside the European Union/European Economic Area whose transferable securities are admitted to trading on a regulated market in the Czech Republic.
A list of the regulated markets in the European Union as of 1 March 2008. However:
- no registration is required if the company is an issuer exclusively of debt securities within the meaning of Article 2 (1) (b) of the Directive, the denomination of which is at least EUR 50 000 per unit or, in the case of debt securities denominated in another currency, equivalent, at the date of issue, to at least EUR 50 000;
- no registration is required under the current legal framework in the Czech Republic if the audit entity is a registered auditor in the Czech Republic or is approved in accordance with the Article 46 of the Czech Act on Auditors;
- no registration is required for auditors in the following third countries, which are considered equivalent to Member States in relation to audits for financial years starting from 2 July 2010: Australia, Canada, China, Croatia, Japan, Singapore, South Africa, South Korea, Switzerland and USA (limited only until 31 July 2013).
How To Apply
A third country audit entity that wishes to register with the Chamber of Auditors of the Czech Republic must decide whether to apply in accordance with the requirements of the Commission Decisions on transitional arrangements (Form A) or in accordance with the full registration requirements of Article 45 of the Audit Directive, that is, Article 47 of the Czech Act on Auditors (Form B). You should read the detailed guidance notes and forms to help you decide. There is full guidance with each form.
To apply for registration a third country audit entity must complete and submit the following forms, including all applicable annexes indicated in the forms:
Form A (CZ) can only be used by a third country audit entity whose home country is one of the third countries to which the European Commission has granted a transitional period and who is able to meet the conditions laid down in the Commission Decision.
Form B (CZ) must be used by all other applicants.
You should download the relevant forms from this website, complete them electronically, and send them to the Czech Chamber of Auditors by e-mail and by post. You should also make sure that you pay the relevant fee (see below).
An annual registration fee is payable on application and on each anniversary of the date of registration. The fees are intended to cover the costs of setting up and running the system of registration. The level of the fee is dependent on whether the application is for full registration under Article 45 of the Audit Directive (i.e. the application is on Form B (CZ)) or is under the transitional arrangements (i.e. the application is on Form A (CZ)). For full registration, the fee is CZK 40,000, and for registration under the transitional arrangements it is CZK 20,000. You should pay the relevant fee by a direct bank transfer to the bank account of the Czech Chamber of Auditors. Please note that you should meet any charges payable to your bank for making the transfer so that we receive the registration fee without deduction of charges.
Komerční banka, a.s., pobočka Havlíčkova 1680/13, 110 00 Praha 1
Bank account: 87039011/0100
Variable symbol: 35
IBAN format of KB account CZ4501000000000087039011
SWIFT address KOMBCZPPXXX
Forms for download
Form A (CZ)
Form A (CZ) - Annexes
Frequently Asked Questions – Form A (CZ)
Form B (CZ)
Form B (CZ) - Annexes
Frequently Asked Questions – Form B (CZ)
Guidance on Good Repute (CZ)
Form U (CZ) Updating Registration Information
Form U (CZ) - Annexes
Questionnaire for Issuers
Questionnaire for Audit Firms
) For this purpose, the EU includes all members of the European Economic Area - that is EU Member States plus Norway, Iceland and Lichtenstein.
)The Commission Decision for the transitional period in respect of audits of annual accounts for financial years starting between 29 June 2008 and 1 July 2010 is applicable to third country audit entities (i) whose home country is one of the following Jersey, Isle of Man, Hong Kong, India, Indonesia, Israel, Japan, Kazakhstan, Malaysia, Mauritius, Mexico, Morocco, New Zealand, Pakistan, Russia, Singapore, South Africa, South Korea, Switzerland, Taiwan, Thailand, Turkey, Ukraine, United Arab Emirates, and United States of America, and (ii) who can provide to the Czech Chamber of Auditors all the required information for registration specified in the Decision.
)The Commission Decision for the transitional period in respect of audits of annual accounts for financial years starting between 2 July 2010 and 31 July 2012 is applicable to third country audit entities (i) whose home country or territory is one of the following Abu Dhabi, Bermuda, Brazil, Cayman Islands, The Dubai International Financial Centre, Egypt, Guernsey, Hong Kong, India, Indonesia, Isle of Man, Israel, Jersey, Malaysia, Mauritius, New Zealand, Russia, Taiwan, Thailand and Turkey, and (ii) who can provide to the Czech Chamber of Auditors all the required information for registration specified in the Decision