Auditors ongoing obligations

Licensed auditors and registered audit firms are required to continue to meet the minimum standards and amendments prescribed by the FMA.

• 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.

We have prescribed ongoing competence requirements. These require auditors to complete 120 hours of relevant training or education in every three year period. 

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  

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.

• The responsibility for conducting investigations and disciplinary proceedings sits primarily with the accredited body that issued the licence. 
• Accredited bodies are able to investigate suspected breaches of auditing and assurance standards, the Act, conditions of an auditor's licence or audit firm's registration, or their conduct rules or code of ethics.
• Where an accredited body, or its disciplinary body determines an auditor or audit firm has breached an obligation, it may cancel or suspend the auditor's licence or impose any other penalty available under its rules. 
• We have some jurisdiction to investigate, or assist an accredited body in an investigation, where requested by the accredited body or where the accredited body has decided not to investigate.
• When we conduct an investigation and find a breach, we can take disciplinary action against the auditor or audit firm.

• We may investigate if it is in the public interest to do so.
• Where we determine an overseas auditor or audit firm has breached its obligations, we can cancel or suspend the auditor's licence or audit firm's registration, and make costs orders. 
• We will refer matters of concern regarding overseas auditors to the audit regulator and their professional body in their home jurisdiction where appropriate.