Government outlines FRC status as competent authority for audit regulation

THE GOVERNMENT has issued guidance on the FRC’s role as the competent authority responsible for the oversight of audits of public interest entities, following the introduction of EU audit reforms.

The Department for Business, Energy and Industrial Strategy (BEIS) also outlined how the FRC can delegate tasks to recognised supervisory bodies such as the ICAEW.

Under the regulation, the FRC is responsible for:

• the approval and registration of statutory auditors;
• technical standards and standards of professional ethics and internal quality control of statutory auditors and audit work;
• continuing education of statutory auditors;
• monitoring (by means of inspections) of statutory auditors and audit work;
• investigation of statutory auditors and audit work; and
• imposing and enforcing sanctions

The framework also allows for the FRC to take over any inspection of investigation if it deemed it to be in the public interest.

“Overall this would mean that the FRC would only have to conduct audit inspections, investigations and disciplinary cases in relation to public interest entities and would oversee the work of recognised supervisory bodies for other audits,” the report said.