News April 2022 FRC announces plan to register auditors of public interest entities

FRC announces plan to register auditors of public interest entities

14 April 2022
  • The FRC’s regulatory toolkit will be bolstered by separating PIE auditor registration from the activities of the professional bodies
  • The FRC will have powers to make timely interventions and ensure audit firms are run in a manner that enhances audit quality
The FRC has today launched a consultation to take responsibility for the registration of auditors of public interest entities (PIEs) from the recognised supervisory bodies (RSBs).
 
The proposal will bolster the FRC’s supervisory toolkit and enable it to become increasingly assertive in holding audit firms to account for the delivery of high-quality audit.
 
Currently, the FRC has insufficient powers to address systemic issues at the firms and must rely on the registration powers of the Recognised Supervisory Bodies. By directly registering audit firms and individuals signing PIE audit reports, the FRC will be able to act decisively when it identifies systemic issues in audit. The FRC will be able to impose conditions, suspensions and remove registration where required.
 
The decision-making in relation to registration matters will be FRC executive led, in line with the approach of other regulators. The FRC will work closely with the RSBs and other stakeholders to implement the new registration process.
 
The FRC’s Executive Director of Supervision, Sarah Rapson said:

“Having direct responsibility for registering and monitoring PIE auditors will allow the FRC to act more quickly and effectively when systemic issues are identified in these audits. 
 
“This complements the FRC’s increasingly assertive supervisory approach and is a strong addition to our regulatory toolkit.”

The consultation is open until 26 May 2022 and is available here.

 

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William BoyackSenior Communications Manager