Auditor regulation and oversight helps to ensure the businesses we regulate (known as FMC reporting entities) have access to competent auditors, and these audits (known as FMC audits) are of a high standard. To achieve this, we:
review audit quality at the registered audit firms to ensure they meet the Auditing and Assurance Standards.
monitor accredited bodies to ensure they are effective frontline regulators of auditors.
Who needs to comply
All auditors and audit firms who perform issuer audits need to comply with the Auditor Regulation Act 2011. Individuals who perform issuer audits need to hold a licence. Audit firms who perform issuer audits must be registered and must ensure that for each issuer audit, engagement partner, concurring or quality review partner holds a licence.
Accredited bodies have the primary responsibility for regulating affected New Zealand based auditors and audit firms. The FMA has the role of granting accreditation to accredited bodies and supervising them on an ongoing basis. We have the primary responsibility of regulating affected overseas auditors and audit firms.
Auditors of an issuer need to hold a licence. Audit firms need to be registered.
New Zealand based auditors and audit firms should contact the accredited bodies (CPA Australia and NZICA) for more information about licencing and audit firm registration. Overseas auditors and audit firms can apply to FMA to be registered or issued with a licence.
Our monitoring of auditors involves quality reviews of all registered audit firms and individual auditors who are not members of a registered audit firm at least once every 4 years. When we conduct an investigation and find a breach, we can take disciplinary action against the auditor or audit firm.
The FMA contributes to these surveys. Participating in these surveys enables us to work together on a global level with the largest audit firms to address audit quality review findings. The areas of inspection themes, (see page 9 of the report) are consistent with our Audit Quality Monitoring Report.