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Proposed changes to the UK Audit Regulations

ICAEW consultation and response

Published: 01 Sep 2023 Update History

As an approved regulator and licensing authority for firms working in the regulated area of audit, we work to ensure firms comply with the UK Audit Regulations and Guidance to strengthen trust and protect the public by enabling, evaluating and enforcing the highest standards in the profession.

This consultation ran from 1 September to 27 October 2023. It is now closed.

About the consultation

ICAEW proposes to make some changes to the UK Audit Regulations and Guidance to address three policy areas. We are seeking feedback from stakeholders on the likely impact of the proposed changes.

The consultation is open from 1 September 2023 to 27 October 2023. Following the consultation process, revised regulations are expected to come into force early in 2024.

ICAEW is consulting with those it regulates for statutory audit on these proposed changes for transparency and to ensure that they are consistent with its duty to act in the public interest. Consulting also helps protect against any unforeseen or unintended consequences that may be brought about by the changes.

This consultation is likely to be of interest to ICAEW members, ICAEW member and regulated firms, non-members who are registered with ICAEW for statutory audit, consumer groups and other professional services regulators.

Key changes

Compulsory alternates

A compulsory requirement for audit-registered sole practices (both individual sole practitioners and single-director corporate practices) to appoint an alternate who would take over in the event of the death or incapacity of the practitioner.

Continuing professional development

Additional material to clarify that registered auditors must ensure that they and their staff comply with their professional body’s continuing professional development requirements (CPD).

Sanctioning responsible individuals

The ability for the Audit Registration Committee to impose regulatory penalties and restrictions on responsible individuals (RIs).

Diversity, equality and inclusion

We do not believe the proposed changes will result in a worse outcome or quality of service for anyone due to their background or life circumstances. However, there is an opportunity in the consultation to tell us if you think your firm or any of your clients will be adversely impacted by the proposals due to a protected characteristic (such as age, disability or race) or due to your individual practising arrangements.

Question 12

  1. Are there any adverse impacts arising from a diversity, equality and inclusion perspective from the changes outlined in this consultation as a whole?

Joint Audit Regulations

ICAEW together with the Institute of Chartered Accountants Ireland (ICAI) and the Institute of Chartered Accountants Scotland (ICAS) are Recognised Supervisory Bodies for the regulation of audit, and jointly have a set of Audit Regulations which are approved by the Financial Reporting Council (FRC). The Audit Regulations were updated in December 2022 for the new public interest entity (PIE) auditor registration scheme and clarifications on ownership tests. The Audit Regulations were also updated in June 2023 to reflect consequential amendments to ICAEW’s Disciplinary Framework.

Both ICAI and ICAS are supportive of the proposed changes to the Audit Regulations as set out in this consultation.

If you prefer to have a printed version of this consultation, we have provided a PDF document that can be downloaded.

Respond to the consultation

Or post your response to ICAEW Regulatory Practice and Policy Team, Professional Standards Department, Metropolitan House, Avebury Boulevard, Milton Keynes MK9 3FS.

This consultation closes on Friday, 27 October 2023.

Review the detail of the changes

Consultation closed 27 October 2023

The results will be published along with the final version of the updated regulations in due course.