Consultation: Licensing of Auditors and Registration of Audit Firms

The Auditor Regulation Act 2011, which comes into force on 1 July 2012, provides for enhanced regulation of auditors who undertake issuer audits. Under the Act, auditors who undertake issuer audits will need to be licensed, and audit firms which undertake issuer audits will need to be registered. FMA has responsibility for prescribing the standards which must be met for auditors to be licensed and for audit firms to be registered. FMA also prescribes the kinds of conditions which can be attached to auditor licences.

This consultation paper covers FMA's proposed:

  • minimum standards for licensing a person must meet in order to be issued with a licence to perform issuer audits;

  • the kinds of conditions to which such licences must, and may, be subject;

  • minimum standards an audit firm must meet in order to be registered; and

  • criteria which must be met in order for individuals and firms to be eligible for the transitional arrangements of the Act.

FMA would appreciate your comments on the proposals in this paper. In particular, we are seeking responses to the questions set out at the end of each section of the document.

FMA is interested to know whether you agree or disagree with the proposals set out in this paper, and the reasons for your views. Where you disagree, FMA would be particularly interested to understand whether you consider the requirement is impractical or inappropriate.

FMA is also happy to receive, and will consider, any suggestions of alternative or additional requirements you believe are appropriate.

Consultation period

The consultation period is four weeks.

Please send your written submissions by using the Contact Form on FMA's website. Select 'make a comment' and clearly label your attached submission document as 'Submission on the Auditor Regulation Act Consultation Paper #1'.

You can also send your written submission to the Compliance Monitoring team at FMA's Wellington offices.

The deadline for submissions is Friday 16 December 2011.

Next steps

Following the consultation period FMA will consider all submissions received and issue a further consultation document for a short period. FMA intends to conduct this second round of consultation, and finalise and gazette the prescribed standards and conditions, by April 2012. While this target date is some time before the 1 July 2012 commencement of the Act, FMA considers it important both the audit profession and accredited bodies are given reasonable time, after the publication of the final standards and conditions, to prepare for the licensing and registration processes.

Submissions will be subject to the Official Information Act 1982. FMA may also make submissions available on its website, or draw attention to submissions in internal or external reports. If you would like FMA to withhold any commercially sensitive, confidential or proprietary information included in your submission, please say so in your submission. Any request to have information withheld will be considered in accordance with the Official Information Act.