NZ and UK regulators ink mutual recognition of audit qualifications

NZ and UK regulators ink mutual recognition of audit qualifications | Insurance Business New Zealand

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NZ and UK regulators ink mutual recognition of audit qualifications

Both authorities also inked a free trade agreement in 2022

Insurance News

By
Kenneth Araullo

New Zealand and the UK have inked an agreement to mutually recognize audit qualifications, with the Memorandum of Understanding on Reciprocal Arrangements (MOURA) being signed by UK’s Financial Reporting Council (FRC) and the NZ Financial Markets Authority (FMA).

This agreement follows the free trade agreement signed in February 2022 between New Zealand and the UK, which included a section on recognizing professional qualifications. The aim was to encourage regulators to establish pathways for recognition and eliminate expensive and cumbersome prerequisites.

To facilitate this understanding, the FRC received funding through the Department of Business and Trade’s Recognition Arrangements Grant Programme. This funding enabled an in-depth analysis of the compatibility of professional qualifications in the UK and NZ. It is also part of the government’s initiative to encourage recognition arrangements across all sectors in the UK.

The MOURA outlines a clear process for auditors holding professional audit qualifications in either the UK or New Zealand to seek recognition of their qualifications and audit rights in the other country. Detailed analysis by both the FRC and the FMA was carried out to ensure that the approved qualifications guarantee a level of professional competence equivalent to that of recognized professional qualifications. In certain scenarios, applicants may need to undertake aptitude tests or a period of adaptation.

Robust audits across both nations

The memorandum is also expected to enhance the quality of the audit markets in both the UK and New Zealand by enlarging the talent pool over time. This supports the interests of accounting firms and professional bodies in both nations. The agreement is projected to develop a more robust audit market by encouraging competition and choice and enabling skilled auditors to transition more easily between the UK and New Zealand.

The FRC also announced that it is exploring similar arrangements with other countries that are significant markets for the UK, aiming to expand the audit talent pool, subject to rigorous assessments of qualifications.

“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,” FRC acting CEO and supervision director Sarah Rapson said. “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.”

“This agreement will provide an easier route for experienced UK auditors to work in New Zealand and help strengthen the local auditing industry,” FMA CEO Samantha Barrass said. “The FMA is committed to supporting greater alignment of the two countries’ auditor markets through mutual recognition of professional qualifications that set high consistent standards. We would like to thank the FRC for the opportunity to collaborate on this important endeavour.”

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