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Accountancy profession closes the gap left by Audit Commission closure

The UK accountancy profession is looking to fill the gap left by the closure of the UK Audit Commission, effective April 2015.

The Local Audit and Accountability Act 2014 abolished the Audit Commission, whose main role was to appoint auditors to local public bodies and oversee their work, meaning that under the new regulation local authorities will be able to appoint their own auditors.

The new regulatory regime will come into effect at the end of March 2015 and is expected to first apply to audits of local public bodies for accounting periods ending 31 March 2018.

However as the Audit Commission closes down a number of its functions, such as oversight and counter fraud operations, have to be transferred to other organisations.

Oversight functions
Under a parliament order of June 2014, the UK Financial Reporting Council (FRC) should assume the oversight functions regarding auditors of local public bodies.

These functions include audit quality inspections of the largest local public bodies and health bodies other than foundation trusts; overseeing the regulation of local public bodies auditors by professional bodies the FRC recognises for this purpose; and setting specific statutory requirements on auditors.

To that effect and under its statutory obligation the FRC has launched a consultation on the ways in which it should implement three of its new responsibilities.

FRC executive director of conduct division Paul George said: "This consultation seeks to strike an appropriate balance between recognising the particular challenges of local public audit and consistency with the arrangements for regulating company auditors."

The consultation will be open for 12 weeks and the FRC said in a statement they expect to implement the regulation and guidance by the end of 2014 ahead of the implementation date of the new regulatory regime.

Counter fraud
The counter fraud functions of the Audit Commission have been transferred to the Chartered Institute of Public Finance and Accountancy (CIPFA), which has launched a national Counter Fraud Centre (CFC).

CIPFA announced that the CFC will act as a centre of excellence in counter fraud, building on the existing tools and guidance transferred from the Audit Commission upon its closure.

The transfer was agreed between CIPFA and the Department for Communities and Local Government who oversees the closure of the Audit Commission.

The CFC will also take responsibility for research, training and generating codes of practice for public sector professionals tasked with addressing fraud in the UK, CIPFA announced.

Rachael Tiffen, the former deputy director of the National Fraud Authority, will head the CFC. Speaking at the launch event of the center she said: "We want to be the source of best practice, resources and training for all those who are seeking to protect taxpayers and the precious resources they depend upon from fraud and misuse."

The CFC founding sponsor is accounting firm Mazars. "Mazars did sponsor the initial launch and also intend to continue supporting the centre through sponsoring events as well as in other ways, this agreement is still being finalised," a CIPFA spokesperson said.

This is not exclusive and CIPFA will work with a range of other sponsors, the spokesperson continued. "This will be one of the ways used to fund the center."

Related links:

Counter Fraud Center

UK FRC

Local Audit and Accountability Act 2014

 

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