ACCOUNTING institutes will retain their role as regulators of the accounting profession and the structure of audit regulation will be maintained and will not be subject to statutory legislation when the government implements the EU Audit Directive and Regulation.
In a written statement, BIS parliamentary undersecretary Baroness Neville-Rolfe, confirmed that the FRC will be the UK competent authority for audit regulation but legislation would be passed to require it to delegate regulator tasks as far as possible to recognised supervisory bodies such as the ICAEW.
This translates into the FRC only having to conduct audit inspections, investigations and disciplinary cases in relation to public interest entities, overseeing the efforts of the recognised supervisory bodies for other
But it did stress that the FRC would have the power to take over an inspection or probe if it deemed it to be in the public interest. By the same token, recognised supervisory bodies can ask the accounting and audit watchdog to undertake work that would otherwise have been delegated to them.
The government also confirmed that it has no intention to make statutory provision to regulate accountants.
Commenting on Baroness Neville-Rolfe’s written statement, Vernon Soare, the ICAEW’s executive director of professional standards, said: “In implementing the requirements of the EU Audit Directive and Regulation, the government has set out a model which recognises the respective strengths of the FRC and the recognised supervisory bodies (in regulating the audit profession without imposing additional regulatory burdens.
“It is now up to all of us as regulators to demonstrate that we can command investor and public confidence in how we regulate the audit market by working together constructively within this new model and with the FRC as the competent authority.”
The commitments given by Neville-Rolfe now need to be enshrined in legislation, he added.
The government also confirmed that all banks, building societies, listed companies, b and qualifying insurers must put their audit out for tender at least every decade and rotate their auditor every 20 years.
Neville-Rolfe said the government will publish a more detailed consultation “in the coming months” building on the 39 responses to the Auditor Regulation: Effects of the EU and Wider Reforms discussion document published in December.
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