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FRC consults on local public audit

21 July 2014 by Alexandra Jones

A consultation on statutory regulations and guidance for local public audits has been issued by the Financial Reporting Council (FRC), as part of the new regulatory framework for local public audit in England and Wales.

The new framework, the Audit and Accountability Act 2014, provides for the abolition of the Audit Commission. It sets out new regulations for auditors of local public bodies that reflect the current framework for the regulation of company auditors.

The Audit and Accountability Act 2014 provides for the abolition of the Audit Commission and establishes a new framework for the regulation of auditors of local public bodies that reflects the current framework for the regulation of company auditors. 

The Government has asked the FRC to take on the following responsibilities:  

  • inspecting the quality of the audits of the largest local public bodies and health bodies other than foundation trusts;
  • overseeing the regulation of auditors of local public bodies by professional bodies the FRC recognises for this purpose; and 
  • setting specific statutory requirements on auditors.

  The consultation document seeks views on statutory requirements:  

  • for transparency reports, which the 2014 Act requires that auditors of major local bodies publish each year;
  • for keeping  the Register of Local Public Auditors;
  • giving statutory guidance to a recognised supervisory body on the approval of individuals as engagement leads for local public audit. 

Paul George, Executive Director, Conduct commented: ‘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.   We would welcome views in particular from local public bodies.’

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