Individual Qualified Auditor conditions

Recognition as a qualified auditor does not constitute a licence under the Auditor Regulation Act 2011. Subject to any restrictive conditions applied to the recognition, the qualified auditor is entitled to undertake audits, reviews or other assurance engagements which are required to be performed by an auditor qualified under the Financial Reporting Act 2013.

If the qualified auditor wishes to undertake assurance engagements under the Financial Conduct Markets Act 2013 or any regulations that refer to that Act, they will need to hold an auditor licence.

Recognition period
The recognition is indefinite and lasts until it is cancelled or suspended (for the period of the suspension).

General conditions applying to the recognition
Appendix V of the NZICA Rules provides that all recognitions will be subject to any general conditions set by the New Zealand Regulatory Board from time to time. The New Zealand Regulatory Board has set the following general conditions that apply to every member recognised as a qualified auditor:

  1. The qualified auditor will comply with NZICA’s Code of Ethics, Rules, and New Zealand’s Auditing and Assurance Standards issued by the New Zealand Auditing and Assurance Board.
  2. The qualified auditor will satisfactorily address any action plan matters arising from an NZICA practice review to the extent that action plan items relate to the member’s engagements (including those where the member was the engagement director of an engagement where the appointed auditor is an incorporated audit firm) or his/her role (i.e. for those matters that relate to firm-wide quality control).
  3. The qualified auditor will continue to meet NZICA’s verifiable Continuing Professional Development (CPD) requirements as set by the New Zealand Regulatory Board from time to time.
  4. When a qualified auditor accepts a statutory assurance engagement (i.e. as the contracting party to the engagement), the qualified auditor must have:
    • Systems, policies and procedures that comply with Professional and Ethical Standards issued by the External Reporting Board; and
    • Professional indemnity insurance that is adequate and appropriate for the nature and scale of the auditor’s business activities.
  5. Notify NZICA of certain matters as specified by NZICA from time to time.

On-going review and annual verification
Section 36E of the Financial Reporting Act 2013 requires that NZICA must maintain adequate and effective systems for keeping under review the recognition of each recognised person and to ensure that the minimum standards for recognition continue to be satisfied. Also, NZICA is required to include an annual review of each person who is recognised.

NZICA will monitor the recognition as part of the risk-based monitoring approach undertaken by the New Zealand regulation team.

The qualified auditor will be required to confirm, on an annual basis, that they continue to satisfy the minimum standards for recognition.

Ongoing competence requirements
There are no additional CPD requirements for a qualified auditor. The qualified auditor is required to satisfy the standard CPD requirements set by the New Zealand Regulatory Board from time to time.

Cancellation or suspension
Appendix V of the Rules provides that NZICA can cancel or suspend the qualified auditor recognition if:

  1. NZICA is satisfied that the qualified auditor is longer a NZICA member and/or hold a Certificate of Public Practice; or
  2. NZICA is satisfied that the qualified auditor has breached any conditions of recognition, whether general conditions or restrictive conditions; or
  3. The qualified auditor requests, by written notice, that NZICA cancels or suspends your recognition.
  4. If NZICA suspends the qualified auditor recognition, it will do so for a period it determines to be necessary taking into account the circumstances of the suspension. When NZICA cancels the recognition, we will let the qualified auditor know in writing when they can reapply for recognition.

    Not permitted to undertake FMC audits
    The qualified auditor recognition permits the auditor to undertake statutory assurance engagements in New Zealand excluding FMC audits, which can only be undertaken by a licenced auditor.

    FMC audits include audits of FMC reporting entities such as listed companies, banks and insurers. The term FMC audit is defined in 6(1) Auditor Regulation Act 2011. FMC reporting entities are defined in section 6(1) of the Financial Markets Conduct Act 2013 (FMC Act). An auditor is not considered to be a “qualified auditor” for the purpose of such engagements unless you also hold an auditor licence.