The Companies Act 2006 of United Kingdom provides
powers to bodies known as Recognised Supervisory Bodies (RSBs) to register and
supervise auditors. The RSBs are:
- The Institute of
Chartered Accountants of Scotland
- Chartered
Accountants Ireland
- The Institute of
Chartered Accountants in England and Wales
- The Association of
Chartered Certified Accountants
- The Association of
Authorised Public Accountants
The regulatory system of RSBs involves the
following:
- Registration
processes
- Monitoring
- Investigation
and discipline
The RSBs are also subject to independent
oversight. The
Financial Reporting Council (FRC) has statutory powers delegated to it by Government
for the recognition, supervision and de-recognition of the RSBs. The FRC conducts regular inspection visits to
the RSBs to ensure that their responsibilities are being discharged
appropriately. The FRC also has the
power to sanction RSBs. In addition to the quality assurance and monitoring
undertaken by the RSBs, the Audit Quality Review (AQR) team of the FRC has
the responsibility for the monitoring of the audits of all listed and other
major public entities.
The FRC operates an independent
disciplinary scheme
for accountants and accountancy in the UK. The Accountancy Scheme operates
independently of the professional bodies. The FRC deals with cases of potential
misconduct which raise or appear to raise important issues affecting the public
interest in the UK. All other cases of potential misconduct continue to be
dealt with by the professional bodies above.
The FRC Conduct Committee has oversight over the operation of the
disciplinary arrangements. The Conduct Committee’s responsibilities in this
regard include:
- Operating independent
disciplinary Schemes for the investigation of cases which raise or appear
to raise important issues affecting the public interest in the UK; and
- Where appropriate,
bringing disciplinary proceedings against those whose conduct appears to
have fallen short of the standard reasonably to be expected of members or
member firms of the relevant professional body.
- Keeping under review the working of the
Schemes and the supporting Regulations to ensure that they are operating
effectively; and
- Regular publicity
for the FRC’s disciplinary activities and achievements as appropriate.
Additional
Thoughts
Compliance with local laws and regulations is a
matter of utmost care for the audit firms. The audit firms should abide by all
the laws and regulations in order to gain the trust of the authorities and the
general public.
