Oversight of Audit

The FRC's statutory responsibilities for oversight of the regulation of statutory auditors are discharged by:

  • recognising professional bodies to act as recognised supervisory bodies ("RSB") and/or to offer a recognised professional qualification for statutory auditors ("recognised qualifying body" or "RQB");
  • assessing periodically that each RSB carries out the key Regulatory Tasks delegated to it by the FRC as Competent Authority in accordance with the requirements of the Delegation Agreement. These functions relate to registration/authorisation of statutory auditors and audit firms, audit monitoring, complaints and discipline, and continuing professional development (‘CPD’);
  • assessing periodically that the RSBs continue to meet the requirements for recognition in the Companies Act 2006 as amended
  • carrying out of functions not delegated to the RSBs such as independent monitoring of audits of public interest entities and independent investigation and disciplinary arrangements for public interest cases; and
  • assessing periodically that the qualifications offered by RQBs continue to meet the requirements of the Companies Act 2006.

The FRC has the following statutory powers in relation to the oversight of audit regulation:

  • to recognise and derecognise RSBs and RQBs;
  • to require information from RSBs and RQBs;
  • to assess whether the RSBs continue to meet the conditions of the Delegation Agreements
  • to serve an enforcement order on an RSB or RQB that is failing to meet its statutory responsibilities;
  • to impose a financial penalty on an RSB or RQB that fails to meet its statutory responsibilities

Guidelines on the Enforcement Measures against RSBs and RQBs (May 2015) (PDF)

The FRC reports annually on the results of this work in a Report to the Secretary of State.

With effect from 17 June 2016, the Government has designated the FRC as the Competent Authority with the ultimate responsibility for the performance and oversight of the audit regulation.

Respective Roles of Government, the FRC and the Accountancy Profession

View the respective roles of the Government and the FRC in relation to the regulation of statutory audit.

Recognition of RSBs and RQBs

There are currently four Recognised Supervisory Bodies (RSBs) and five Recognised Qualifying Bodies (RQBs) for the purpose of statutory audit.

Delegation Agreements

Under Regulation 3(1) of SATCAR 2016 the FRC is the competent authority with ultimate responsibility for the public oversight of statutory auditors and for the performance and oversight of certain audit regulation tasks.

Eligibility Criteria for Statutory Auditors

Regulation 3(1) of SATCAR 2016 sets out the responsibilities of the Competent Authority.

Statutory Auditors Transparency Reporting

The FRC has implemented the legal requirements on the auditors of certain public interest entities to publish annual Transparency Reports, in accordance with the Statutory Audit Directive.

FRC Statutory Regulations

Learn about the legislation which provided the statutory frame work for audit regulation in the UK.

Memorandum of Understanding on Reciprocal Arrangements with IAASA

Since the UK left the EU, the UK and the Republic of Ireland (ROI) are third countries to each other.

Approval of CPA Ireland qualification as an approved third country qualification

The FRC Board has made a declaration approving the audit qualification of CPA Ireland which is a recognised accountancy body (RAB) in the Republic of Ireland.