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UK-Australia deal backed amid talent shortage

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A deal signed between audit watchdogs in the UK and Australia is expected to increase the supply of auditors in a bid to tackle the shortage.

9th Apr 2024
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The mutual recognition agreement signed between audit watchdogs in the UK and Australia should “increase the supply of high-quality auditors for both economies”, according to the Association of Chartered Certified Accountants (ACCA).

The UK’s Financial Reporting Council (FRC) and the Australian Securities and Investment Commission (ASIC) have announced a Memorandum of Understanding on Reciprocal Arrangements (MOURA).

The agreement is designed to make it easier for auditors to work between both countries and allows those who have obtained professional audit qualifications as a statutory auditor in either the UK or Australia to “more easily apply for recognition of their qualification and audit rights in the other nation”.

It follows the UK and Australia’s free-trade agreement coming into force in May 2023, which included a chapter on the recognition of professional qualifications.

Increase the high-quality supply

Maggie McGhee, executive director for strategy and governance at ACCA, believes that over time, the MOURA “should increase the supply of high-quality auditors for both economies”.

“This is important at a time when audit talent globally is increasingly in short supply,” she said. “This will in turn support the continued efforts from the respective regulators of the two countries to drive high-quality audit in the public interest.”

Simon Grant, group executive of advocacy and international development for Chartered Accountants Australia & New Zealand, noted that the ability to be recognised and work overseas is a “major drawcard for a career in audit, and this agreement provides greater clarity and confidence for auditors moving between Australia and the UK”.

Jonathan Jones, director of policy and strategy for the Institute of Chartered Accountants in England and Wales (ICAEW), believes deals like this help to address a “significant problem” with foreign-qualified auditors’ ability to work in the UK.

Brexit creating challenges

Under the 2006 Companies Act, auditors are required to hold an approved audit qualification to gain UK signing rights. However, the ICAEW has noted that so far, “very few” overseas qualifications are approved.

Jones said that Brexit has created additional challenges, adding: “When the UK was in the EU, mutual recognition was part and parcel of that arrangement. However, EU auditors now fall under the same category as those from further afield.

“This lack of qualification recognition in the UK means that a foreign-qualified auditor – who may be both highly experienced and senior – will have to spend time and effort gaining further approved UK experience and passing exams here before they can acquire the UK audit qualification.”

A welcome step

Jones said it’s a process that “takes at least two years and as long as three”.

“That can be a challenge for UK audit firms and the individuals concerned,” he said. “From an employer perspective, the individuals may already possess the same quality and quantity of experience as UK auditors. Qualification recognition deals such as this are a welcome step to improving the situation.”

Replies (4)

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By Postingcomments
09th Apr 2024 17:16

should “increase the supply of high-quality auditors for both economies”

An increase for both countries? 2+2=5

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By FactChecker
09th Apr 2024 20:20

I know we're no longer allowed to think of all Aussies as descended from ex-convicts ... but the opportunity for a joke (or at least a wry grimace) has been missed here.

Was it not only last year when yet another substantial fine was handed out (to KPMG this time) ... but uniquely neither for incompetence nor financial malfeasance - just the breath-taking audacity of widespread cheating (via management-endorsed supply of answers to one and all) during their Ethics & Independence online exams!

No wonder we're interested in importing such qualified drongos back for our auditing needs!

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Replying to FactChecker:
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By FactChecker
10th Apr 2024 10:16

It's been pointed out to me that I failed to make the connection explicit ... in that it was KPMG in Australia who were fined for cheating on Ethics exams.
With that (lack of) attention to detail, maybe I should take up auditing!

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Replying to FactChecker:
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By Paul Crowley
10th Apr 2024 19:25

Add another £20M for exam cheating in the Netherlands for KPMG.
https://www.accountancydaily.co/kpmg-fined-ps20m-exam-cheating-dutch-aud...

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