(1) Before granting approval, provisional approval or transitional approval to a third country by relevant regulations, the Secretary of State may take into account a report prepared by the competent authority ["Competent authority" is defined in section 1261(1) of the Companies Act 2006.]) that assesses the extent to which the third country’s audit regulatory regime is comparable to that of the United Kingdom.

(2) The report of the competent authority may take account of any assessments of the third country’s audit regulatory regime carried out by or on behalf of an equivalent third country or a transitional third country.