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 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;
- assessing periodically that the qualifications offered by RQBs continue to meet the requirements of the Companies Act 2006;
- carrying out specific reviews of aspects of audit regulation, which can be found here.
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)
The FRC reports annually on the results of this work in a Report to the Secretary of State. Previous reports can be found here.
As the Competent Authority for audit regulation in the UK, the FRC will regularly monitor the developments in the market for providing statutory audit services to public interest entities and, by 17 June 2016, and at least every three years thereafter, draw up a report on such developments and submit it to the Committee of European Audit Oversight Bodies (‘CEAOB’).