FMA consults on auditor licensing and audit firm registration

Media Release
16 November 2011

The Financial Markets Authority has begun consulting with the auditing profession and other interested parties on the implementation of the Auditor Regulation Act, which comes into force on 1 July 2012.

FMA has published the first of a series of papers seeking submissions and feedback on the approach to be taken by FMA on setting the standards that will apply to the licensing of auditors and the registration of audit firms.

"The Auditor Regulation Act is a new piece of legislation that requires FMA to prescribe minimum standards for individuals and firms conducting audits of issuers in New Zealand," said Elaine Campbell, Head of Compliance Monitoring.

The Act requires FMA to consult with people who represent the views of the auditing profession and any other organisations or groups that will be substantially affected by the proposed requirements.

It also requires that the minimum standards for auditors must promote the quality, expertise, and integrity of the audit profession, and the recognition of the professional status of New Zealand auditors in overseas jurisdictions.

"This is an important development for the restoration of investor confidence in New Zealand's capital markets," Ms Campbell said. "It will help to ensure audits of issuers are being performed to a high professional standard and in accordance with the auditing standards.

"I encourage interested parties to consider the proposals put forward in our consultation documents and to make submissions."

The first consultation paper can be found here. The final date for submissions is Friday, 16 December 2011.

Ends

Background on the Auditor Regulation Act 2011

• The Auditor Regulation Act passed into law on 12 May, 2011.
• The Act applies only to audits of issuers of securities and other entities who are required to file publicly financial statements under the Financial Reporting Act.
• FMA has overall responsibility for the regulation of auditors in New Zealand.
• However, the frontline regulation of auditors is split between:

- accredited bodies, which have primary responsibility for regulating New Zealand-based auditors, and:
- FMA, which has primary responsibility for regulating overseas auditors.

• FMA also has the role of granting accreditation to accredited bodies and supervising them on an ongoing basis.
• The first accredited body is the New Zealand Institute of Chartered Accountants (NZICA).
• NZICA will start assessing applications from July 2012.