Section 1221: Approval of third country qualifications, Companies Act 2006

The Secretary of State may declare that the following are to be regarded for the purposes of this Chapter as holding an approved third country qualification—

persons who are qualified to audit accounts under the law of a specified third country, or

persons who hold a specified professional qualification in accountancy obtained in a specified third country.

A declaration under subsection (1)(a) or (b) must contain provision to the effect that a person is not to be regarded as holding an approved third country qualification for the purposes of this Chapter unless the person—

already holds a professional qualification which—

covers subjects and skills which are the same or substantially the same as the subjects and skills that are covered by a recognised professional qualification, where the knowledge of those subjects and skills is essential for the pursuit of the profession of statutory auditor, and

demonstrates knowledge of those subjects and skills to the same or substantially the same standard as that demonstrated by the recognised professional qualification, or

holds a professional qualification which does not comply with paragraph (a) and has met whichever of the requirements of subsection (1B) as is specified in the declaration.

The declaration must specify that the condition in subsection (1A)(b) is satisfied in one of the following ways—

only by passing an aptitude test in accordance with subsection (7A),

only by completing an adaptation period in accordance with subsections (7C) and (7D), or

either by passing an aptitude test in accordance with subsection (7A) or by completing an adaptation period in accordance with subsections (7C) and (7D), according to the choice of the person.

A declaration under subsection (1)(b) may be expressed to be subject to the satisfaction of any specified requirement or requirements.

The Secretary of State may make a declaration under subsection (1) only if he is satisfied that—

in the case of a declaration under subsection (1)(a), the fact that the persons in question are qualified to audit accounts under the law of the specified third country, taken with any requirement or requirements to be specified under subsection (1A), or

in the case of a declaration under subsection (1)(b), the specified professional qualification taken with any requirement or requirements to be specified under subsections (1A) or (2),

affords an assurance of professional competence equivalent to that afforded by a recognised professional qualification.

The Secretary of State may make a declaration under subsection (1) only if he is satisfied that the treatment that the persons who are the subject of the declaration will receive as a result of it is comparable to the treatment which is, or is likely to be, afforded in the specified third country or a part of it to—

in the case of a declaration under subsection (1)(a), some or all persons who are eligible to be appointed as a statutory auditor, and

in the case of a declaration under subsection (1)(b), some or all persons who hold a corresponding recognised professional qualification.

The Secretary of State may direct that persons holding an approved third country qualification are not to be treated as holding an appropriate qualification for the purposes of this Chapter unless they hold such additional educational qualifications as the Secretary of State may specify for the purpose of ensuring that such persons have an adequate knowledge of the law and practice in the United Kingdom relevant to the audit of accounts.

The Secretary of State may give different directions in relation to different approved third country qualifications.

The Secretary of State may, if he thinks fit, having regard to the considerations mentioned in subsections (3) and (4), withdraw a declaration under subsection (1) in relation to—

persons becoming qualified to audit accounts under the law of the specified third country after such date as he may specify, or

persons obtaining the specified professional qualification after such date as he may specify.

An aptitude test required for the purposes of subsection (1B) —

must test the person's knowledge of required subjects and skills,

may test the person's knowledge of rules of professional conduct;

must not test the person's knowledge of any other matters.

For the purposes of subsection (7A), a subject or skill is a required subject or skill if it is covered by a recognised professional qualification and knowledge of it is essential for the pursuit of the profession of statutory auditor, but—

the professional qualification already held by the person ("the existing qualification") does not cover the same or substantially the same subject or skill, or

the existing qualification does not demonstrate knowledge of that subject or skill to the same or substantially the same standard as that demonstrated by the recognised professional qualification.

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An adaptation period is a period, not exceeding three years, in which the person ("the applicant") pursues the profession of statutory auditor under the supervision of another person who holds an appropriate qualification, subject to an assessment ("the ability assessment") of the applicant's ability to pursue the profession of statutory auditor in the United Kingdom.

The adaptation period must be completed, and the ability assessment must be carried out, in accordance with the rules and practices of a recognised supervisory body (see paragraph 7A of Schedule 10).

The Secretary of State may, if he thinks fit, having regard to the considerations mentioned in subsections (3) and (4), vary or revoke a requirement specified under subsection (2) from such date as he may specify.

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Section 1221: Approval of third country qualifications

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