Enforcement Procedures
Published: 25 September 2023
3 minute read
On 17 June 2016, the FRC became the 'competent authority' for audit in the UK under new legislation which came into force following the EU Audit Regulation and Directive, which have been retained in domestic UK Law.
This page contains links to the documents, policies and guidance which are supplemental to and support the FRC’s enforcement regime procedures under the Audit Enforcement Procedure (AEP), Accountancy Scheme, Actuarial Scheme and PIE Auditor Registration Regulations.
Enforcement process
A high-level overview of our enforcement process is set out below.
Case Examiner
Information sources include: horizon scanning, complaints, whistleblowing disclosures, other FRC teams, regulators, audit firms and professional bodies.
Decision to investigate
Taken by the FRC’s Board or Conduct Committee following a referral by the Case Examiner. Passed to Executive Counsel.
Investigation
Undertaken by Enforcement Division’s forensic accountants and lawyers. We have powers to require production of information and documents from audit firms, auditors and certain audited entities (AEP) and accountants and actuaries (Schemes). There is a general duty to cooperate under both regimes. Independent expert opinion on potential Misconduct/ breaches is sought in most cases.
Settlement
Settlement is encouraged under both the Schemes and AEP with significant discounts to fines typically available to respondents where early admissions are made. Under all regimes, settlements are approved by the Independent Reviewer.
Tests
If at any time the Executive Counsel decides that the tests have not been met, the case is closed.
Proposed allegations
Grounds for potential Misconduct/breaches set out in document that is served on audit firms, accountants and/or actuaries. Opportunity for respondents to make representations.
Enforcement action
Decision by Executive Counsel to pursue enforcement action where the relevant tests are met. Final allegations served on Respondents.
Determination
Breaches determined by the Executive Counsel can be accepted by the Respondent. Independent Reviewer approves (AEP). If breaches (AEP) or allegations of Misconduct (Schemes) are not accepted the case will be referred to the independent Tribunal. Tribunal will conduct full hearing and determine if breaches or Misconduct. Public will have access.
Sanctions
Sanctions for Misconduct/breaches imposed. Outcome published.
Audit Enforcement Procedure (AEP) - Supporting documents
| Name | Audit Enforcement Procedure |
|---|---|
| Publication date | 29 June 2023 |
| Format | PDF, 8.7 MB |
| Name | Guidance for the Case Examiner |
| Publication date | 29 June 2023 |
| Format | PDF, 1.3 MB |
| Name | Guidance on the opening of investigations (AEP) |
| Publication date | 4 January 2022 |
| Format | PDF, 1.2 MB |
| Name | Guidance on disclosure of Unused Material |
| Publication date | 4 January 2022 |
| Format | PDF, 93.3 KB |
| Name | Hearing Guidance |
| Publication date | 29 June 2023 |
| Format | PDF, 1.5 MB |
| Name | Sanctions Policy (AEP) |
| Publication date | 4 January 2022 |
| Format | PDF, 1.3 MB |
| Name | Publication Policy (AEP) |
| Publication date | 26 April 2022 |
| Format | PDF, 2.1 MB |
Accountancy Scheme Policies and Guidance - Supporting documents
| Name | Accountancy Scheme |
|---|---|
| Publication date | 24 February 2022 |
| Format | PDF, 228.9 KB |
| Name | Accountancy Regulations |
| Publication date | 1 April 2021 |
| Format | PDF, 147.3 KB |
| Name | Guidance on the commencement of investigations (Accountancy Scheme) |
| Publication date | 13 January 2021 |
| Format | PDF, 80.1 KB |
| Name | Accountancy Scheme Guidance on the delivery of Formal Complaints |
| Publication date | 1 April 2021 |
| Format | PDF, 271.2 KB |
| Name | Accountancy Scheme Sanctions Guidance |
| Publication date | 1 April 2021 |
| Format | PDF, 308.2 KB |
| Name | Publication Policy (Accountancy and Actuarial Schemes) |
| Publication date | 26 April 2022 |
| Format | PDF, 2.0 MB |
| Name | Guidance on the disclosure of unused material (Accountancy and Actuarial Schemes) |
| Publication date | 31 January 2023 |
| Format | PDF, 1.3 MB |
Actuarial Scheme Policies and Guidance - Supporting documents
| Name | Actuarial Scheme |
|---|---|
| Publication date | 24 February 2022 |
| Format | PDF, 232.6 KB |
| Name | Actuarial Regulations |
| Publication date | 1 April 2021 |
| Format | PDF, 140.7 KB |
| Name | Guidance on the commencement of investigations (Actuarial Scheme) |
| Publication date | 21 February 2022 |
| Format | PDF, 79.2 KB |
| Name | Actuarial Scheme Guidance on the delivery of Formal Complaints |
| Publication date | 1 April 2021 |
| Format | PDF, 104.4 KB |
| Name | Actuarial Scheme Sanctions Guidance |
| Publication date | 1 April 2021 |
| Format | PDF, 285.3 KB |
| Name | Publication Policy (Accountancy and Actuarial Schemes) |
| Publication date | 26 April 2022 |
| Format | PDF, 2.0 MB |
| Name | Guidance on the disclosure of unused material (Accountancy and Actuarial Schemes) |
| Publication date | 31 January 2023 |
| Format | PDF, 1.3 MB |
Policies and Guidance applicable to the AEP and both Schemes
| Name | Board Guidance on Retention and Delegation of Investigation Decisions |
|---|---|
| Publication date | 4 January 2022 |
| Format | PDF, 1.3 MB |
The following documents also apply to the PIE Auditor Registration Regulations tribunal panels.
| Name | Convening Tribunals and Appeal Tribunals |
|---|---|
| Publication date | 4 January 2022 |
| Format | PDF, 2.3 MB |
| Name | Tribunal Panel Members Statement of Independence Guidance Notes |
| Publication date | 23 September 2022 |
| Format | PDF, 1.5 MB |
| Name | Tribunal Panel Members Fees and Expenses Policy (April 2024) |
| Publication date | 1 April 2024 |
| Type | Policy |
| Format | PDF, 126.7 KB |