Take Responsibilities Seriously, Audit Regulatory Bodies Urged
The Professional Oversight Board of the Financial Reporting Council has published its Report to the Secretary of State for Business, Innovation and Skills for the year to March 31, 2011.
The report comments on the POB’s responsibilities to oversee the regulation of auditors by recognized professional bodies, and the regulation of actuaries and accountants by their professional bodies.
Coming hot on the heels of the publication of POB’s Annual Report for 2010/11 concluding that its audit inspection results for the fiscal year 2010-2011 are better than those of the previous year, the report also comments on POB’s responsibility as the Independent Supervisor of Auditors General.
Main points raised by the report suggest that “the audit regulatory bodies continue to take their responsibilities very seriously.”
Additionally, the comments emphasized the necessary improvements on some aspects of POB’s regulation of auditors.
“All the Recognised Qualifying Bodies need to improve elements of the way in which they award exemptions from certain examinations,” a POB statement said.
The statement added that all the Recognised Supervisory Bodies have to strengthen the processes for approving individuals entitled to sign audit opinions on behalf of an audit firm.
The POB particularly orders the Association of Chartered Certified Accountants to ensure that applicants must be competent to perform audit work “where the initial audit experience has been gained some time ago.”
“We are still not confident that Chartered Accountants Ireland, through its Chartered Accountants Regulatory Board, will meet its statutory obligations for inspecting audit firms within a six year cycle, without further decisive action,” the POB said.
“The Association of Chartered Certified Accountants has made significant changes to its final audit examination, in response to earlier recommendations, and we will carry out a further review towards the end of 2011, to consider whether this is now sufficiently challenging.
“The Association of International Accountants has made progress in response to our earlier concerns as to the standard of some of its examinations, but it needs to make further changes as a priority.
“The Actuarial Profession’s response to our recommendations (on the regulation of practising actuaries and on quality controls at actuarial firms) has started to take shape, although further work is needed.”
The report also includes a summary of the Audit Inspection Unit’s (AIU) Annual Report for 2010/11, which was published on July 19.
John Kellas, Interim Chairman of the Oversight Board, said: “This year for the first time we name in the report the individual regulatory bodies to which our principal findings and recommendations apply.
“We welcome the profession’s support for this development which will bring greater transparency. We hope that this publicity will provide even more encouragement to the bodies to respond to the Oversight Board’s concerns positively and in a timely way.”