POB uses greater transparency to encourage more robust regulatory processes
News types: Publications
Published: 21 July 2011
POB PN 67
The Professional Oversight Board, a part of the Financial Reporting Council, today publishes its Report to the Secretary of State for Business, Innovation and Skills for the year to 31 March 2011 (PDF). The Report comments on the Board’s responsibilities:
- for statutory independent oversight over the regulation of auditors by recognised professional bodies;
- for non-statutory oversight of the regulation of actuaries and accountants by their professional bodies;
- for regulation internationally;
- as the Independent Supervisor of Auditors General.
The main points are:
- The audit regulatory bodies continue to take their responsibilities very seriously.
- Nevertheless, there are aspects of their regulation of auditors that require improvement. In particular:
- All the Recognised Supervisory Bodies1 need to make more robust their processes for approving individuals entitled to sign audit opinions on behalf of an audit firm (paras 2.18 – 2.24).
- We are still not confident that one body will meet its statutory obligations for inspecting audit firms within a six year cycle without further decisive action (paras 2.27 - 2.28).
- All the Recognised Qualifying Bodies need to improve elements of the way in which they award exemptions from certain examinations (paras 2.31 – 2.37).
- Two bodies still need to do more to satisfy us that all their examinations provide a sufficiently challenging test for those wishing to be statutory auditors (paras 2.41 - 2.44).
- The Actuarial Profession’s response to our recommendations (on the regulation of practising actuaries and on quality controls at actuarial firms) has started to take shape, although further work is needed (paras 6.2 – 6.4).
The report also includes a summary of the Audit Inspection Unit’s (AIU) Annual Report for 2010/11, which was published on 19th July.
John Kellas, Interim Chairman of the Oversight Board, said:
“This year for the first time we name in the report the individual regulatory bodies to which our principal findings and recommendations apply. We welcome the profession’s support for this development which will bring greater transparency. We hope that this publicity will provide even more encouragement to the bodies to respond to the Oversight Board’s concerns positively and in a timely way.”
1 Individuals responsible for audit at registered firms must hold an audit qualification from a Recognised Qualifying Body (RQB). Audit firms who wish to be appointed as a statutory auditor in the UK must be registered with, and supervised by, a Recognised Supervisory Body (RSB). See Section 2 of the Report.
Notes to Editors
Notes to Editors
The Financial Reporting Council (FRC) is the UK’s independent regulator responsible for promoting high quality corporate governance and reporting to foster investment.
The Professional Oversight Board contributes to the achievement of the Financial Reporting Council’s overall aims through its work to meet its main responsibilities, set out above. The Board is independent of the accountancy and actuarial professions. Its members have wide experience of business and the professions, the public sector, accountancy, auditing and actuarial work. The Interim Chair is John Kellas CBE.
Document created under a former FRC operating body.