Auditors are licensed and overseen nationally, and independence rules limit what else the audit firm may do for its client. The US PCAOB oversees audits of SEC registrants and the SEC bans a list of non-audit services; the EU bans a longer list for public-interest entities and caps permitted non-audit fees at 70% of the audit fee. In the UK and Germany only registered members of approved bodies may act.
Who regulates auditors
In the US the PCAOB, created by the Sarbanes-Oxley Act, oversees audits of companies subject to the securities laws; issuers with registered securities must file annual reports certified by independent public accountants where SEC rules require. There is no general federal audit duty for private companies.
In the UK only members of a recognised supervisory body who are eligible under its rules may be appointed as statutory auditors. In Germany a statutory auditor must hold an extract from the professional register kept under the Wirtschaftsprüferordnung.1234
Non-audit services
For SEC registrants, an auditor loses independence if it provides prohibited services such as bookkeeping, financial systems design, valuation, internal audit outsourcing, management functions and legal services. For EU public-interest entities the prohibited list also covers most tax services and payroll, and extends to the entity's parent and controlled undertakings in the EU; Member States may allow some immaterial tax and valuation work.
Even permitted services are capped in the EU: after three consecutive years, non-audit fees to a public-interest entity group may not exceed 70% of the average audit fee for the last three years.5678
| Regime | Prohibited services | Fee cap | Source |
|---|---|---|---|
| US SEC registrants | Bookkeeping, systems, valuation, actuarial, internal audit, management, HR, broker-dealer, legal, expert | None researched | Regulation S-X Rule 2-01(c)(4) |
| EU public-interest entities | Tax (most), management, bookkeeping, payroll, controls and IT design, valuation, legal, internal audit, financing, share dealing, HR | 70% of average audit fee after three years | Regulation (EU) 537/2014 Arts 4-5 |
Decisions to make
- Which group entities are public-interest entities or SEC registrants?65The strictest non-audit service bans and fee caps apply to them and their related entities.
- Does the group buy tax or advisory work from its auditor?68Most tax services are prohibited for EU public-interest entity groups and the 70% cap limits other work.
- Is the proposed auditor registered and eligible in each country?34UK and German law allow only registered auditors to be appointed.
Documents usually needed
- Auditor independence confirmation
- Non-audit services pre-approval policy and register
- Fee analysis comparing audit and non-audit fees over three years
- Auditor registration evidence in each country
- PCAOB registration evidence for auditors of SEC filers
Common mistakes
- Asking the group auditor to keep the books of a subsidiary of a listed parent
- Overlooking that EU prohibitions reach the parent and controlled undertakings
- Measuring the 70% cap on one entity rather than across the group
- Assuming any qualified accountant can sign a German or UK statutory audit report
Questions businesses ask
Can our auditor also do our tax compliance?
For an EU public-interest entity, most tax services are prohibited unless the Member State uses its option for immaterial services. For SEC registrants tax services were not covered by the list read here.675
Do US private companies need a statutory audit?
Federal law requires audited annual reports from SEC registrants; private companies generally face audits only through state law, lenders or investors, which were not researched here.2
What this guide does not yet confirm
These points need checking with a qualified local professional before you rely on them.
- Audit regulators by name in the UK (FRC and planned successor), Germany (APAS), France (H2A), Singapore (ACRA), India (NFRA) and the Gulf were not confirmed on official pages.
- US pre-approval rules for tax services and audit committee duties could not yet be checked.
- UK and IESBA ethical standards could not yet be checked.
Sources and review status
Each statement is numbered to the source it was checked against. We use official sources where we can, and each statement says whether it was checked against an official or a secondary source. Sources last checked on 19 October 2026. None of it has been professionally reviewed yet: it is research checked against official and secondary sources by WONE Global, not legal or tax advice.
The Public Company Accounting Oversight Board was established by the Sarbanes-Oxley Act to oversee the audit of companies that are subject to the US securities laws, to protect investors and the public interest. Federal. PCAOB registration and standards also apply to audits of brokers and dealers (subsection (c)).
Statutory text read on the Cornell Legal Information Institute reproduction of the United States Code; the official text is published at uscode.house.gov.
Issuers with securities registered with the SEC must file annual and quarterly reports, with annual reports certified by independent public accountants where SEC rules require. Federal, Securities Exchange Act section 13(a). There is no general federal statutory audit requirement for private companies; state law, lenders and investors may require one.
Statutory text read on the Cornell Legal Information Institute reproduction of the United States Code; the official text is published at uscode.house.gov. The statement that there is no general federal audit duty for private companies is an inference from the scope of section 13(a).
In the UK an individual or firm is eligible for appointment as a statutory auditor only if it is a member of a recognised supervisory body and is eligible under that body's rules. Companies Act 2006 Part 42.
A German statutory auditor must hold an extract from the professional register showing its registration under the Wirtschaftsprüferordnung as a statutory auditor. Applies to Wirtschaftsprüfer, audit firms and, for medium-sized GmbHs, vereidigte Buchprüfer.
An auditor of an SEC registrant is not independent if it provides prohibited non-audit services, including bookkeeping, financial information systems design, valuation, actuarial, internal audit outsourcing, management functions, certain human resources, broker-dealer, legal and expert services. Federal, Regulation S-X; some services are permitted where the results will not be subject to audit procedures.
Regulatory text read on the Cornell Legal Information Institute reproduction of the Code of Federal Regulations; the eCFR at ecfr.gov is the government publication.
An auditor of an EU public-interest entity may not provide prohibited non-audit services to the entity, its parent or its controlled undertakings, including most tax services, bookkeeping, payroll, internal control and financial IT design, valuation, certain legal services, internal audit and services linked to financing or investment strategy. Public-interest entities; the prohibition covers the audited entity, its parent and its controlled undertakings within the Union.
EU Member States may permit some tax and valuation services to a public-interest entity audit client where their effect on the audited financial statements is immaterial or nil. Member State option, subject to conditions in Article 5(3).
Where an EU public-interest entity's auditor provides permitted non-audit services for three or more consecutive years, their fees are capped at 70% of the average statutory audit fees of the last three years. Covers services to the audited entity, its parent and controlled undertakings; services required by Union or national law are excluded, and a competent authority may grant an exceptional exemption for up to two years.
Questions on this topic
8 statements on audit regulators and independence
