(1) The Supervisory Authority may exempt from Chapter 7 a third-country auditor or third-country audit entity registered under Chapter 5 pursuant to section 1573 if a quality assurance review has, under another Member State's or third country's system of quality assurance, been carried out in relation to the auditor or audit entity during the 3 years preceding the making of the application.

(2) On the making of that application, if -

(a) the Supervisory Authority is satisfied that the quality assurance review referred to in subsection (1) has been carried out as referred to in that subsection, and

(b) the system of quality assurance referred to in that subsection has been assessed as equivalent in accordance with section 1580, the Supervisory Authority shall grant the exemption and the third-country auditor or third-country audit entity shall be exempted from Chapter 7 accordingly.