UK and Australia signed MoU on recognising auditors qualifications of both countries

Both FRC and ASIC have signed MOURA which comes into effect on 26 March 2024. The MOURA provides a pathway by which auditors who have obtained a professional audit qualification in either the UK or Australia can apply for recognition of their qualification and gain audit rights in the other jurisdiction. 

Under Section 1221 of the Companies Act 2006 the Secretary of State may make a declaration approving a third country qualification.

The FRC has made a declaration approving the following qualifications:

1. CA Qualification awarded by Chartered Accountants Australia and New Zealand (CAANZ) in Australia to a person who has passed the Australian variant of the Taxation papers. This is subject to completing an adaptation period in the UK.

2. CPA qualification awarded by CPA Australia (CPAA) in Australia to a person who:

(a) holds an accredited degree (under the joint CPA Australia and CAANZ scheme) or has completed the CPA Australia foundation papers; and

(b) has passed both the Advanced Auditing and Assurance elective paper and an elective paper in either Taxation (Australia) or Advanced Taxation.

This is subject to completing an adaptation period in the UK.

3. Registered Company Auditor. Individuals registered by ASIC to conduct audits in Australia and who have either (i) successfully completed the CAANZ Chartered Accountant qualification and hold full membership of CAANZ or (ii) successfully completed the CPA Australia CPA qualification and hold full membership of CPA Australia. This is subject to completing a UK aptitude test.

According to FRC Press release in this regard, it will improve the quality of the UK audit market by increasing the number of skilled statutory auditors able to practice in the UK over time and make it easier for UK audit firms to export their services to Australia.

The accounting activities sector, which includes audit services, is a significant part of the UK economy, generating £44 billion in 2023. The sector supported over half a million jobs and accounted for nearly £4 billion of exports in 2022.

The FRC assessed the relevant Australian qualifications as equivalent to UK audit qualifications, including utilising an independent external expert. This work was made possible thanks to funding through the Department for Business and Trade (DBT)’s Recognition Arrangements Grant Programme. The scheme is part of the government’s support for UK regulators and professional bodies in all sectors to develop recognition arrangements.

The UK and Australia signed a free trade agreement which came into force in May 2023. This agreement included a chapter on the recognition of professional qualifications, encouraging regulators to pursue recognition agreements such as this one to remove costly and burdensome requirements.

Similar audit arrangements have recently been signed with New Zealand and Switzerland and the FRC is continuing to explore other agreements subject to rigorous qualification standards being met.

Source: FRC, UK