Auditors ongoing obligations
Auditing and assurance standards
Under the Auditor Regulation Act 2011, the Financial Reporting Act 1993, the Financial Reporting Act 2013 and the Financial Markets Conduct Act 2013, licensed auditors are required to carry out audits in accordance applicable auditing and assurance standards.
Continued compliance with prescribed standards
Licensed auditors and registered audit firms are required to continue to meet the minimum standards and amendments prescribed by the FMA.
Conditions
Both licensed auditors and registered audit firms will be subject to conditions. For auditors, the kinds of conditions that licences may be subject to are prescribed by the FMA.
The exact conditions which an auditor or audit firm is subject to will be set by the accredited body that issues the licence for New Zealand based auditors and audit firms, or by the FMA for overseas auditors and audit firms. Conditions will be published on the register of auditors and audit firms, and notified to the auditor or audit firm at the time of being set.
For overseas auditors, the FMA will generally apply our standard licence conditions and for overseas audit firms and our standard conditions of registration. However, in some circumstances, we may vary these conditions or attach additional conditions.
Transitional licences are not initially subject to conditions except a condition that the auditor is licensed for all kinds of issuer or FMC reporting entity audits. Conditions can be varied or added by the accredited body for New Zealand auditors or the FMA for overseas auditors.
Ongoing competence requirements
We have prescribed ongoing competence requirements. These require auditors to complete 120 hours of relevant training or education in every three year period.
The auditor regulation plan
Our auditor regulation plan includes:
- the specific impacts, outcomes, or objectives we seek to achieve or contribute to as a result of auditor regulation
- the ways we expect accredited bodies to contribute to those impacts, outcomes, or objectives
- How we propose to monitor accredited bodies.
It covers the current financial year and two further years, and is updated annually.
See our auditor regulation and oversight plan for the 3 years ending 30 June 2018
Quality reviews
All registered audit firms and individual auditors who are not members of a registered audit firm are subject to a quality review at least once every 4 years.
A review includes:
- an assessment of the design of the internal control systems of the audit firm or licensed auditor
- a review of selected audit files for compliance with auditing and assurance standards.
It is our responsibility to conduct these reviews, however, we may arrange for accredited bodies to carry out a quality review, in whole or in part, on our behalf.
