AUDIT REGULATION IN THE UK: SOME PRELIMINARY OBSERVATIONS
| Published date | 01 February 1994 |
| DOI | https://doi.org/10.1108/eb024800 |
| Date | 01 February 1994 |
| Pages | 125-132 |
| Author | STELLA FEARNLEY,MICHAEL PAGE |
| Subject Matter | Accounting & finance |
AUDIT
REGULATION IN THE UK: SOME PRELIMINARY
OBSERVATIONS
Received: 1st December, 1993
STELLA
FEARNLEY AND MICHAEL PAGE
STELLA
FEARNLEY
IS
GRANT
THORNTON
LECTURER
IN-
ACCOUNTING
AT THE
UNIVERSITY
OF
SOUTHAMPTON.
SHE
IS
A COUNCIL MEMBER
OK
THE
INSTITUTE
OF CHARTERED
ACCOUNTANTS
IN ENGLAND AND WALES AND
A
PAST PRESIDENT OF
ITS
SOUTHERN DISTRICT
SOCIETY.
SHE HAS
RESEARCHED
AND WRITTEN
WIDELY
IN AUDITING.
MICHAEL
PAGE
IS
HALPERN AND
WOOLF
PROFESSOR
OF
ACCOUNTING
AT THE UNIVERSITY OF
PORTSMOUTH
WHERE HE
LEADS
THE
CORPORATE
GOVERNANCE
GROUP.
HE HAS
PUBLISHED
EXTENSIVELY IN FINANCIAL
REPORTING
AND AUDITING.
THE
AUTHORS
ARE
JOINTLY
RESEARCHING
THE
IMPACT OF
AUDIT
REGULATION
ON FIRMS
OF
ACCOUNTANTS.
THEY ARE SUPPORTED
BY
A
RESEARCH GRANT FROM THE RESEARCH
BOARD
OF
THE INSTITUTE OF CHARTERED
ACCOUNTANTS
IN
ENGLAND
AND
WALES.
ABSTRACT
A new regime for registering and monitor-
ing auditors has come into force in Great
Britain. The power to make rules for audit
practice, qualification and registration
has been delegated to the professional
accountancy
bodies.
Two significantly
dif-
ferent
systems
have
come
into being, the one
operated by the Institutes of Chartered
Accountants and the other
by
the Chartered
Association of Certified Accountants. The
audit register contains a mixture of infor-
mation derived from different registration
practices. There is evidence that the new
regime has significantly increased the cost
of auditing small limited companies at a
time when the usefulness of such audits is
widely questioned, even by auditors them-
selves. The
effects
of the new regime on the
audit of large companies, about which
there has been public concern following
recent company
collapses,
appear
limited.
INTRODUCTION
A completely new regulatory regime
started in Great Britain on 1st
October, 1991, involving the regis-
tration and monitoring of all com-
pany auditors. The operation of the
regime is the responsibility of the
auditing profession, supervised by
the Secretary of State. As with other
systems of regulation, control is
exercised upon a market through a
125
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