Jersey said on Monday it has secured the “maximum recognition” available from the European Union, for a “third country” jurisdiction, for its oversight regime for auditors.
The oversight regime is administered by the Jersey Financial Services Commission (JFSC) and is responsible for overseeing the companies which audit the financial statements of listed Jersey companies. Examples of such listed companies would be those which have shares or other securities traded on an EU regulated market, such as the London Stock Exchange.
Because Jersey, a UK Crown Dependency, is not a member of the European Union, such recognition by the EU is crucial for businesses based there to be able to take advantage of EU cross-border freedoms.
The European Commission confirmed it was satisfied with the JFSC’s information confidentiality provisions in relation to auditors in its recently published legislation, referred to as an Adequacy Decision, the JFSC said in a statement.
The Adequacy Decision also recognised that the JFSC’s ability to co-operate with EU audit oversight bodies is equivalent to that required under the EU’s Statutory Audit Directive, the statement noted.
JFSC director general John Harris, pictured, said the European Commission’s Adequacy Decision was “a welcome external endorsement of the quality of Jersey’s auditor oversight regime”.
He noted that the decision means audit supervisors in EU member states would now be able to enter into bilateral co-operation agreements with the JFSC in order to allow the exchange of audit working papers and other audit related documents that fall within the scope of the Statutory Audit Directive. This, he noted, would “assist in the cross- border supervision of auditors”.
The European Commission’s Adequacy Decision can be viewed here.