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 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.
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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.
Commenting on this, FRC acting CEO and executive director, 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.”
FMA CEO, Samantha Barrass, added: “This agreement will provide an easier route for experienced UK auditors to work in New Zealand and help strengthen the local auditing industry.
“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.”
UK small business minister, Kevin Hollinrake, concluded: “The UK is a services superpower, exporting over £400bn of services a year. This agreement with New Zealand will open up even more exciting opportunities for UK qualified professionals so they secure new contracts and diversify their business. I am delighted that the Department’s grant programme could support the FRC to deliver this arrangement.”