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Working in the regulated area of audit

Firms working in the regulated area of audit are required to comply with the audit regulations and guidance. On this page, you'll find links to advice and guidance to help your firm remain compliant.

Become an ICAEW registered auditor

Audit regulations and guidance

Firms registered for audit with ICAEW are required to comply with the audit regulations and guidance. Revised Audit Regulations and Guidance effective from 17 June 2016.

Now available: Audit Essentials 2016 – Access the latest guidance based on recent audit monitoring reviews.

Audit monitoring for all ICAEW audit registered firms

We conduct monitoring visits to firms registered for audit with ICAEW. Our monitoring visits contribute to ICAEW’s objective of maintaining the highest standards among our member firms.

During your visit, we will review and assess your firm’s procedures, processes and controls to make sure:

  • audits comply with professional standards; and
  • your firm meets the requirements of the audit regulations.

All ICAEW registered auditors are included in the scope of our audit monitoring.

Prior to the implementation of the new Audit Regulation & Directive (ARD) regime on 17 June 2016, many firms were used to receiving an ICAEW monitoring visit at fairly standard intervals – every three years if your firm had any ‘major audits’ in FRC scope or other AIM / ISDX companies or, if not, once every six years.

The ARD, and the FRC when delegating activities to ICAEW as an RSB, make it clear that RSBs should now use a risk-based approach to selecting firms for their next visit and should not for instance automatically default to six years between visits. The various factors for consideration include;

  • the size and complexity of the firm;
  • its RSB-scope audit clients; and
  • previous regulatory history.

Your next visit date will depend upon this risk-based selection approach.

You may have your next visit on or just before the six-year anniversary of your previous visit, but this is not an automatic default or right under the ARD. You may find we visit you more frequently. We will continue to notify you when we select you for a visit.

Usually, we carry out our audit visits separately from visits for Practice Assurance, DPB (Investment Business) and probate. However, in some cases, it's more practical to cover more than one area. Please refer to our leaflet, Your Practice Assurance visit for more information.

Firms with PIEs and other ‘retained audits’

Since 17 June 2016, any firm which audits at least one Public Interest Entity (PIE) will now be monitored directly by the FRC. In simple terms, a PIE is a fully listed company, bank, or an insurance provider. The FRC has also decided it will monitor audits of AIM quoted entities with a market cap over €200m (average over 3 years) and Lloyd’s syndicates. These together with PIEs are called retained audits. Firms with at least one large PIE audit will be visited by FRC’s AQR team every three years but for other firms these visits will extend to every six years. AQR visits will cover both the firm’s overall quality control procedures for the audit of PIEs and the PIE/retained audits. The FRC will advise firms when a visit is due to take place.

We will continue to visit your firm if you have PIEs or other retained audits to review all other audit work. We may need to review some aspects of your whole-firm procedures to complete our visits.

Useful resources for audit firms
Audit fees

Read more about ICAEW fees and the fees we collect on behalf of other organisations. There is also a useful FAQS section and information about paying fees.

Audit Regulations and Guidance

Revised Audit Regulations and Guidance came into effect on 6 April 2008, when the relevant sections of the Companies Act 2006 came into force. Periodically, changes are made to the regulations. Firms registered for audit with ICAEW are required to comply with the audit regulations and guidance.

Audit Regulations and Guidance archive

Changes in firm structure – please tell us within 10 business days

It’s important to maintain your firm record accurately. An inaccurate or out of date firm record may constitute a misdescription of your firm. It could also lead to regulatory or disciplinary action.

Model articles

The Audit Regulations and Guidance require a registered auditor to be controlled in a certain way (see Chapter 2 of the Audit Regulations and Guidance).

If the registered auditor is a company, it's possible that persons other than the named shareholder may have interests in the company’s shares. This could mean that the company is no longer controlled in accordance with the audit regulations.

The directors therefore need the appropriate powers to call for information about interests in shares, and disenfranchise shares if necessary, so that the registered auditor would continue to be controlled in accordance with the audit regulations.

The following model articles have been drafted to help a firm include special provisions within its articles of association.

Audit in Ireland

Although this mainly concerns corporate audit firms, we suggest that all firms that undertake audits of Irish entities read this note which draws attention to a few matters unique to the Irish jurisdiction.

Audit Regulations and Guidance in Ireland

The Audit regulations and guidance were updated in June 2012 to cover both Ireland and the UK as explained in Audit News 51. Most of the regulations are the same for both countries, but there are some minor differences. Regulations unique to Ireland or which do not apply in Ireland are set out in this schedule of changes.

Audit requirements in the Crown Dependencies of Jersey, Guernsey and the Isle of Man
Special arrangements apply to firms that audit companies incorporated in one of the Crown Dependencies which have 'transferable securities' admitted to trading on a 'regulated market' in the EU. The requirements apply even if the firm or company is not operating in a Crown Dependency.
Auditor cessation statements
To help registered auditors with the notification requirements when an auditor ceases to hold office, a flowchart and guidance notes set out the process.
Audit Regulation 3.09

Access to audit papers on change of audit appointments after 6 April 2008

For financial years starting on or after 6 April 2008, when an auditor ceases to hold an audit appointment, the successor auditor can look at the working papers of the predecessor auditor. For the avoidance of doubt, although this regulation places an obligation on the 'predecessor' auditor, the appointment referred to in the regulation and at the end of the related guidance is that of the 'successor' auditor. It is irrelevant when the predecessor was appointed. (Note, in the article in Audit News 45, about the implementation of audit regulation 3.09, the reference to 'an accounting period' in the penultimate sentence should be to 'a new appointment'.)

There is additional guidance for both predecessor and successor auditors on the provision of access to information (including example letters to use).

Audit Regulation 3.13 – Access to audit working papers
To help registered auditors with AR 3.13, we've produced some guidance on Audit Regulation 3.13.