The MOURA will provide a process for auditors who have obtained professional audit qualifications in either the UK or New Zealand to apply for recognition of their qualification and audit rights in the other nation.
The UK and New Zealand have signed a first of its kind agreement to recognise audit qualifications in both the UK and NZ so that auditors can more easily work between both countries.
The Memorandum of Understanding on Reciprocal Arrangements (MOURA) was signed by the UK’s Financial Reporting Council (FRC) and the NZ Financial Markets Authority (FMA) – the competent audit authorities for each country.
The UK and New Zealand signed a free trade agreement in February 2022 which included an annex on recognition of professional qualifications, encouraging regulators to establish routes to recognition and remove costly and burdensome requirements.
The FRC was awarded funding through the Department of Business and Trade’s Recognition Arrangements Grant Programme, making it possible to analyse the compatibility of UK and NZ professional qualifications. The funding is part of the government’s plans to encourage UK regulators and professional bodies in all sectors to agree recognition arrangements.
The MOURA will provide a process for auditors who have obtained professional audit qualifications in either the UK or New Zealand to apply for recognition of their qualification and audit rights in the other nation.
The agreement follows detailed analysis by both the FRC and the FMA to ensure the approved qualifications affords an assurance of professional competence equivalent to that afforded by a recognised professional qualification. Where applicable, applicants are required to complete aptitude tests or a period of adaptation.
The FRC said the MOURA will improve the quality of the UK and New Zealand audit markets by increasing the size of the talent pool over time and supports the interests of UK and New Zealand accounting firms and professional bodies. The agreement will help to deliver a more resilient audit market in the UK and New Zealand through greater competition and choice and by enabling skilled auditors to have their qualifications recognised and so move more easily between the UK and New Zealand.
The FRC is currently exploring similar arrangements with other countries that are important markets to the UK, to further widen the audit talent pool, subject to thorough assessments of the qualifications.
The FRC’s Acting CEO and Executive Director of Supervision, Sarah Rapson said: “The FRC welcomes this first of its kind agreement which will attract auditors to the UK, strengthen audit relations between the UK and NZ and supports the Government’s commitment to recognise professional qualifications internationally.
It ensures a more efficient pathway for senior auditors to work in both countries, boosting access to a wider pool of auditors, while upholding the high professional standards expected of auditors.”
Commenting on the news, Mike Suffield, director of Policy and Insights at ACCA, said: “ACCA welcomes the UK and New Zealand audit authorities agreeing mutual recognition of audit qualifications. It is good to see the work the two bodies have done to assess professional competence.
“Over time this memorandum of understanding (MoU) should increase the supply of high quality auditors for both economies. This is important at a time when audit talent globally is increasingly in short supply. This will in turn support the continued efforts from the respective regulators of the two countries to drive high quality audit in the public interest.”
He added: “This builds on the professional ties between the two countries, and helps embed the value of the strategic alliance between ACCA and Chartered Accountants ANZ which works to increase the flow of qualified accountants, including auditors, between the two countries.”
Article appreaed in Accountancy Today.