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

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

Documents
Name Accountancy Scheme
Publication date 24 February 2022
Format PDF, 228.9 KB
Name Accountancy Regulations
Publication date 30 March 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 1 February 2023
Format PDF, 1.3 MB

Actuarial Scheme Policies and Guidance - Supporting documents

Documents
Name Actuarial Scheme
Publication date 24 February 2022
Format PDF, 232.6 KB
Name Actuarial Regulations
Publication date 30 March 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 1 February 2023
Format PDF, 1.3 MB

Policies and Guidance applicable to the AEP and both Schemes

The following documents also apply to the PIE Auditor Registration Regulations tribunal panels.

Documents
Name Convening Tribunals and Appeal Tribunals
Publication date 21 September 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
Name Tribunal and Appeal Panel Terms of Appointment
Publication date 4 January 2022
Format PDF, 359.1 KB