Exempted entities
Exempted entities

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Exempted entities


The Auditors Oversight Law ("AOL") empowers the AOA to designate any entity as an “exempted entity”.


Exemption removes the audits of the exempted entity’s financial statements from the scope of the AOA’s oversight as otherwise set out in the AOL.


Generally speaking, entities will only be designated as “exempted” when to do so would avoid unnecessary regulation but not adversely affect effective performance of the AOA’s mandate.


Individual entities could be designated as “exempted” but it would be more usual that particular types or classes of entity will be specified.


In deciding whether to specify an entity/entities as “exempted” the AOA will consider precedent in other jurisdictions (for example, the European Union).


Notification of which entities are exempted


Exempted entities must be specified as such in the Regulations to the AOL.


AOL Regulations (Nov 2014)



The AOA will also advise registered auditors of any changes made or proposed to previously exempted entities and include details on this website.


Currently exempted entities


Subject to publication of the initial Regulations to the AOL, the AOA expects the following categories of entity to be specified as exempted:


Certain issuers of debt securities listed on EU markets:

a company, partnership, unit trust or other entity, whether or not incorporated or established in the Islands  that is an issuer exclusively of debt securities admitted to trading on a regulated market in a Member State of the European Union within the meaning of Article 2(1)(b) of Directive 2004/109/EC, the denomination per unit of which is at least Euro 50,000 or, in the case of debt securities denominated in another currency, the equivalent, at the date of issue, to at least Euro 50,000.



Certain issuers of listed securities which are not freely negotiable:

a market traded company whose transferable securities are not, in the determination of the Authority, freely negotiable on the regulated market upon which such securities are listed or admitted, provided that such determination is published by the Authority in the Gazette.