EY has created a legal entity in Belgium in order to enable its EU-licensed member firms to fully comply with the relevant requirements under the EU 8th Directive, as the Big Four member prepares for Brexit
This directive allows any audit firm licensed by an EU member state to control audit firms in other EU member states.
As part of the move, EY member firms in the EU and European Economic Area (EEA) member states as well as five other countries will move from Ernst & Young Europe LLP, a UK-incorporated entity, to this new Belgium-incorporated entity.
The International Accounting Bulletin understands the decision will not result in any staff moving from the UK to Belgium, and that it is designed to enable the network to continue to operate as usual regardless of whether Britain leaves the EU with an agreement in place or simply crashes out.
The EY UK member firm (Ernst & Young LLP, UK) will continue to be controlled by Ernst & Young Europe LLP.
In January, The Irish Auditing and Accounting Supervisory Authority (IAASA) warned UK firms that in the event of a no-deal exit from the EU, UK audit firms would have to register as ‘third country’ auditors to continue their operations in Ireland or for Irish clients.