The EU 8th Company Law Directive set out the requirements for each member state to have a common minimum regulatory system for auditors of limited companies. The United Kingdom enacted this through the Companies Act 1989 and added a requirement for monitoring. Since 1 October 1991, a firm must be a Registered Auditor to conduct company audit work.
In 1990 the Department of Trade and Industry granted the status of Recognized Supervisory Body to ICAEW, ICAS and ICAI, thus allowing these institutes to register and regulate Registered Auditors.
Specifically, this work is done by Audit Registration Committees which register auditors and then organise monitoring.
Monitoring is conducted on behalf of the Institutes by the Joint Monitoring Unit, which was set up in 1987 to monitor the compliance of firms authorized to conduct investment business and whose role was extended in 1991 to include monitoring the work of Registered Auditors.
The monitoring activities of the JMU involve:
• issuing and reviewing firms' Annual Returns,
• conducting visits to firms,
• reporting the results of visits to the ARCs.
Activities of the JMU aim to assess whether or not the firm has complied with Audit Regulations and Standards. The JMU seeks to assist firms by making practical suggestions for improvements of their audit performance.
Words you may need:
ICAEW – Institute of Chartered Accountants of England and WalesÈíñòèòóò äèïëîìèðîâàííûõ áóõãàëòåðîâ Àíãëèè è Óýëüñà
ICAS – Institute of Chartered Accountants of ScotlandÈíñòèòóò äèïëîìèðîâàííûõ áóõãàëòåðîâØîòëàíäèè
ICAI – Institute of Chartered Accountants of IrelandÈíñòèòóò äèïëîìèðîâàííûõ áóõãàëòåðîâ Èðëàíäèè