New Zealand has proposed a new bill to strengthen auditor regulation for the first time.
The Auditor Regulation and External Reporting Bill will require New Zealand’s accounting institute to regulate auditors as a specialist profession, rather than chartered accountants.
Currently, any chartered accountant holding a Certificate of Public Practice can carry out audits provided they comply with the New Zealand Institute of Chartered Accountant’s (NZICA) code of ethics.
The new licensing system would apply to auditors of issuers and would require such auditors to be registered. However, it would not impact on audits of non-issuers.
The Bill, which was introduced to parliament this month by Commerce Minister Simon Power, also requires the proposed Financial Markets Authority (FMA) to be responsible for auditor oversight monitoring and reporting on the adequacy and effectiveness of NZICA’s regulatory systems.
As part of the proposals accounting and auditing standard setting will be consolidated and the duty of a newly created External Reporting Board (XRB).
Power’s Bill will bring New Zealand in line with international regulatory norms, help ensure international recognition of New Zealand auditors overseas and allow them to work in other jurisdictions.
NZICA expects the Bill to be enacted by May 2011 and for the XRB to commence operations on 1 July 2011. A date for auditor regulation changes is yet to be agreed by the FMA and NZICA.