The FRC has agreed a Memorandum of Understanding on Reciprocal Arrangements IAASA
By James E Barbour CA, Director, Policy Leadership
21 January 2021
Memorandum of Understanding on Reciprocal Arrangements with IAASA.
Following the end of the transition period with the EU, UK auditors that wish to audit entities incorporated in the Republic of Ireland (ROI) will need to be separately registered under a different process as set out in ROI law for the first time. Therefore, the Financial Reporting Council (FRC) has agreed a Memorandum of Understanding on Reciprocal Arrangements (“MOURA”) with the Irish Auditing and Accounting Supervisory Authority (IAASA), the ROI competent authority. This MOURA will facilitate the ROI’s ability to register UK statutory auditors as ROI statutory auditors by meeting the requirement in Irish law that a third country auditor cannot be approved as an ROI statutory auditor unless reciprocal arrangements with that third country are in place.
UK statutory auditors which are included on the ROI Audit Register remain able for the time being to audit entities in the ROI without re-registration as ROI statutory auditors. Nevertheless, the MOURA provides confidence to individuals and firms that they will be able to seek registration in both jurisdictions whenever it is required and that there will be minimal disruption to their ability to provide audit services. In some cases, it will be necessary that an individual passes an aptitude test.
Approval of CPA Ireland qualification as an approved third country qualification
Under section 1221 of the Companies Act 2006 the Secretary of State may make a declaration approving a third country qualification. This function has been delegated to the FRC. The FRC Board has made a declaration approving the audit qualification of CPA Ireland which is a recognised accountancy body (RAB) in the ROI. In making the declaration the FRC has declared that it is satisfied that the CPA Ireland qualification affords an assurance of professional competence equivalent to that afforded by a recognised professional qualification in the UK and that all holders of a UK recognised professional qualification will receive treatment in the ROI which is likely to be comparable to the treatment of holders of the CPA Ireland qualification in the UK.
Individuals holding an audit qualification from CPA Ireland and after passing a UK aptitude test, will now be able to have that qualification recognised for the purpose of becoming a UK statutory auditor.