Auditors Audit Firm Supervision Public Interest Entity (PIE) Auditor Registration

Public Interest Entity (PIE) Auditor Registration

Introduction

In 2018, Sir John Kingman, at the request of the then Secretary of State for Business, Energy and Industrial Strategy (BEIS), undertook a review of the FRC (the “Kingman review”). The objectives for the Kingman review were to undertake a root and branch review of the FRC and to put forward proposals to make the FRC “a beacon for the best in governance, transparency and independence”.

A key recommendation of the Kingman review was that the FRC should undertake the approval and registration of audit firms conducting PIE audits. The Kingman review noted concern that the delegation of the approval and registration of statutory auditors leaves the FRC without sufficient power to act where systemic quality issues with an audit firm are identified. The Kingman review also recommended that a new FRC regime for the approval and registration of audit firms conducting PIE audits should have a range of available sanctions.

In the 2021 consultation ‘Restoring trust in audit and corporate governance’ (the "White Paper 2021"), BEIS commented at paragraphs 9.1.6 and 9.1.7 that:

“9.1.6 The Government has concluded that the regulator [the FRC] should carry out the task of determining whether individuals and firms are eligible for appointment as statutory auditors of PIEs, rather than continuing the present delegation of this task to the RSBs. The RSBs would continue to carry out the delegated task of determining whether individuals and firms are eligible to be appointed as statutory auditors of non-PIE entities.
9.1.7 The Government considers it a priority for the regulator to reclaim the task of determining the eligibility of individuals and firms to carry out PIE statutory audits so as to raise the quality of those audits. It further considers that the concerns raised by consultees to date can largely be mitigated by the FRC consulting with the RSBs on the design of the new regime.”

The White Paper 2021 consultation closed in July 2021.

In light of the Government’s clear policy steer, the FRC has been preparing to assume responsibility for PIE Auditor Registration. As part of those preparations, the FRC has developed the PIE Auditor Registration proposals that are the subject of this consultation.

As the project progresses further updates to this page will be made.

Back to top

Consultation and Draft PIE Auditor Registration Regulations

The consultation runs from 14 April 2022 to 26 May 2022.

View the Consultation Document

View the Draft PIE Auditor Registration Regulations

Back to top

Draft Public Interest Entity (PIE) Auditor Registration Guidance

View the Draft Public Interest Entity (PIE) Auditor Registration Guidance (Last updated: 22/04/22).

Please note we will continue to review and update the Draft Public Interest Entity (PIE) Auditor Registration Guidance.

Back to top

Draft Proposed Changes to the Eligibility Criteria

View the Draft Proposed Changes to the Eligibility Criteria

Back to top