In the UK only firms who are Registered Auditors can conduct regulated audit work. These FAQS explain the specialist authorisation regime surrounding audit work.
How does my firm become a registered auditor?
If you want your firm to become a Registered Auditor, you will need to:
- Nominate an Audit Compliance Principal who is responsible for audit compliance in your firm
- Ensure that at least 50% of the voting rights in your firm are held by holders of the audit qualification
- Submit an application form for Audit Registration to ICAS.
- Submit applications for each Responsible Individual in your firm (see below)
- Submit applications for each Affiliate in your firm (see below)
- An audit registration fee is payable on application (please contact ICAS).
- Have appropriate Professional Indemnity Insurance in place.
Download: Audit Registration application form
Audit terms explained
A firm can only accept appointment as an auditor if it is a Registered Auditor. In the UK, we register firms to act as Registered Auditors, rather than individual persons. A Registered Auditor is a firm that is registered with a Recognised Supervisory Body (RSB) and is eligible to be appointed as a Statutory Auditor to undertake regulated audit work.
Each person responsible for audits and signing audit reports in the audit firm must be a Responsible Individual (RI).
Recognised Supervisory Body (RSB)
An RSB is a body that is recognised under the Companies Act for the purposes of the registration and supervision of Registered Auditors. ICAS is an RSB and registers, regulates and monitors audit firms.
Each person responsible for audit work and signing audit reports in an audit firm must be a Responsible Individual. To become a Responsible Individual, the individual must hold a Practicing Certificate and an audit qualification.
The audit qualification
The audit qualification is awarded to ICAS members, and members of other RSBs, who have demonstrated that they have achieved sufficient knowledge and supervisory experience in audit, through examination and work experience gained within an Authorised Training Office. Initially, the audit qualification was automatically awarded, however the requirements were changed by the Companies Act 1989, meaning that, since 30 September 1991, the qualification must be applied for. This is obtained through providing evidence of UK audit experience by recording of such in the ICAS Achievement Log, including at least 210 days of UK audit experience. Individuals who held an appropriate qualification under the previous legislation are 'grandfathered in'. In the UK, if you were a member of one of the Institutes or ACCA on both 31 December 1989 and 30 September 1991 you are deemed to hold the audit qualification. Only a member holding the audit qualification counts towards the control percentage as stipulated in the Audit Regulations.
Regulated audit work
This is audit work in respect of:
- a company incorporated in the UK or ROI;
- or other entities requiring audits under legislation specified in the Audit Regulations and is reserved by law or constitution, to a 'registered auditor'.
Any principal in the firm who is not a member of an RSB (see above) must become an audit Affiliate. As the firm is regulated we need to ensure that all of the principals in the firm are too. We therefore require those that are not already members of an RSB (who already need to comply) to become Affiliates and sign up to our rules and regulations.
Audit Compliance Principal
Each firm needs to appoint and Audit Compliance Principal (ACP) who is responsible for ensuring that the firm complies with theAudit Regulations, Audit Guidance and Audit Regulations and Guidance. The 'Roles and Responsibilities of the Audit Compliance Principal' - a help sheet that guides you through the main responsibilities.
What is involved in the responsible individual (RI) application?
Each individual who is responsible for audit work and who signs audit reports must be a Responsible Individual for audit work: Each RI needs to
- Be a Practicing Certificate holder and hold the audit qualification.
- Submit an RI Application Form
- If the applicant has never been an RI, has not been an RI in the last three months, or has not had any audit clients in the last 12 months, submit an Audit Experience Form
- Guidance notes are available when applying for RI Status.
“We have published an updated Responsible Individual application form and Audit Experience form which much be used from 1 July 2016. This is to ensure that all parties satisfy the compliance requirements under International Education Standard (IES) 8, Professional Competence for Engagement Partners Responsible for Audits of Financial Statements.”
What is involved in applying to become an affiliate?
We need to ensure that all principals who are not members of a Recognised Supervisory Body are regulated by ICAS.
They need to:
- Submit an Affiliate Application Form.
- If you have a corporate body as a principal, submit a Corporate Affiliate Form application form for each corporate body.
What happens next?
The ICAS team will aim to process your application forms within two weeks of receiving your forms. Please note that each application requires to go through a detailed checking process including consideration of fit and proper status and, for RI applications, competence and experience. There is no automatic approval of any application, given the public interest element of audit applications and you will be notified when a decision has been made regarding your application. However, you should note that the following circumstances could delay the application:
- If you have not provided all of the information required we will contact you to request this information. This could delay your application being processed. We will let you know how this affects your application timescales.
- For less straightforward applications, the Audit Registration Committee (ARC) PDF [57 KB] may need to consider the application (for example concerns over eligibility criteria, potential fit and proper matters notified or concerns over audit experience for applicants RIs). This may take a bit longer as the ARC meets only six times a year. We will let you know how this affects your application timescales.
- We are here to help. If you would like to know the status of your application at any time please contact Emma Reid on 0131 347 0282 or via email at email@example.com.
What happens once my firm is registered?
Once you are registered there are a number of obligations that you will need to fulfill. We are here to help, so please contact us if you would like advice or support. Your firm will need to meet the following:
- Comply with the Audit Regulations and Guidance.
- Notify ICAS within ten days of any changes in the firm.
- Continue to comply with the professional indemnity insurance requirements.
- Complete a Firms Annual Return each year.
- Be monitored by ICAS Audit Monitoring.
- The Audit Compliance Principal is required to attend the mandatory audit course at least once every five years.
What are the audit regulations?
All audit firms, Responsible Individuals and audit staff are required to comply with the Audit Regulations & Guidance.
- Audit Regulations applicable to 31 March 2017 PDF [799 KB]
- The Audit Regulations below are applicable from 1 April 2017. These have been updated to reflect the changes to Irish Legislation following the EU Audit reforms.
- Audit Regulations applicable from 1 April 2017 PDF [954 KB]
Are you changing the legal status of your firm?
If your firm is changing legal status (for example incorporating or becoming an LLP) you will need to submit a new application form for Audit Registration. You will no longer need to submit an RI application form or an Affiliate application form for any existing RIs and Affiliates transferring over from the old firm to the new firm. Any new RIs or Affiliates would need to complete an application form.
How to access the public audit register
The Register of Statutory Auditors contains information on Statutory Auditors and Audit Firms in the UK.
The following information is available on this Register:
- Contact details for all Recognised Supervisory Bodies (RSBs) and details of firms registered by them.
- Details of Audit Registered Firms, who registers them and the individuals linked to them.
- The full address of the registered firm, the RSBs and the individual details.
The Register can be accessed at the Audit Register Website
How do I complain?
If you are not happy with the service you have received from us in respect of your applications please contact the department's Director, Lesley Byrne in the first instance on 0131 347 0245 or email and she will revert back to you.
What happens if my application is denied?
If your application is denied:
- You will be notified of the reason for this denial.
- If you are unhappy with this decision, concerns should be notified in writing to the Director in the first instance and this will be considered by the Audit Registration Committee (ARC).
- If you are dissatisfied with the ARCs decision, there is an Independent Review and Appeals process, which is explained in Chapter 8 of the Audit Regulations.
Download Audit Regulations PDF [799 KB]
The EU Service Directive and The Provision of Services Regulations
In accordance with the requirements of the EU Services Directive, which was brought into UK law by The Provision of Services Regulations 2009, information is available about the rules, regulations and formalities that apply to service activities in other EU countries. This information can be found through Points of Single Contact (PSCs), which are online e-government portals. Guidance is available on the UK Government's website.
Mandatory Course Obligations and support
ICAS can help your firm run a compliant audit practice in the following ways:
- Our audit course: Keeping Audit on the Right Track
This course aims to educate Audit Compliance Principals (ACPs) and Responsible Individuals (RIs) in developing a strong compliance function and preventing some of the recurring issues identified on audit monitoring visits. The first five-year cycle of the courses ‘Keeping Your Audit Firm on the Right Track’ and ‘Keeping Your Audit Files on the Right Track’ was completed as at the end of 2015. Since then this has been consolidated into one single course, lasting three hours, which is presented across varied locations each year. As of 1 January 2016, there has been an increase in the mandatory requirement of this course, where it is considered that the course will be beneficial to a wider audience to increase audit quality among ICAS audit registered firms.
The resulting requirements are that:
- Each ACP will be required to attend at least once in the three-year period from 1 January 2016 to 31 December 2018;
- Each RI will be required to attend at least once in the five-year period from 1 January 2016 to 31 December 2020;
- Newly approved RIs will be required to attend the course within 12 months of approval; and
- Previously inactive RIs (i.e. approved RIs who are not signing audit reports), who have recommenced the role, will be required to attend the course within 12 months of becoming active.
The course is presented by the ICAS Audit Monitoring team and has been created to educate and support ACPs and RIs and covers all areas of audit compliance responsibilities, key regulatory issues, common compliance failings, and key findings from ICAS audit monitoring visits. The course is open to all audit professionals and many attend yearly to maintain audit CPD, however, there is a mandatory requirement, as noted above. Detailed materials are provided during the course, and this is useful reference material for all firms.
- Audit News: We issue Audit News quarterly which should help your RIs and staff keep up to date with audit technical and regulatory developments.
- Help sheets: We have issued a range of help sheets to help you with your audit work, including help sheets for specialist audit areas.
Any enquiries regarding Audit Registration should be emailed to us or call us on 0131 347 0282 for further assistance.