Auditor Regulation Act 2011
Version as at 30 March 2025
Auditor Regulation Act 2011
Public Act |
2011 No 21 |
|
Date of assent |
19 May 2011 |
|
Commencement |
see section 2 |
Note
The Parliamentary Counsel Office has made editorial and format changes to this version using the powers under subpart 2 of Part 3 of the Legislation Act 2019.
Note 4 at the end of this version provides a list of the amendments included in it.
This Act is administered by the Ministry of Business, Innovation, and Employment.
Contents
The Parliament of New Zealand enacts as follows:
1 Title
This Act is the Auditor Regulation Act 2011.
2 Commencement
(1)
Sections 1 to 7 and 84 come into force on the day after the date on which this Act receives the Royal assent.
(2)
The rest of this Act comes into force on a date to be appointed by the Governor-General by Order in Council; and 1 or more orders may be made bringing different provisions into force on different dates.
(3)
To the extent that it is not previously brought into force under subsection (2), the rest of this Act comes into force on 1 July 2012.
(4)
An order under this section is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).
| Legislation Act 2019 requirements for secondary legislation made under this section | ||||
| Publication | PCO must publish it on the legislation website and notify it in the Gazette | LA19 s 69(1)(c) | ||
| Presentation | The Minister must present it to the House of Representatives | LA19 s 114, Sch 1 cl 32(1)(a) | ||
| Disallowance | It may be disallowed by the House of Representatives | LA19 ss 115, 116 | ||
| This note is not part of the Act. | ||||
Section 2(2): subpart 3 of Part 2 and section 92 brought into force, on 1 February 2012, by clause 2(1) of the Auditor Regulation Act Commencement Order 2011 (SR 2011/380).
Section 2(2): subpart 5 of Part 2 (except sections 51, 52, and 55), subpart 8 of Part 2, section 91, and sections 93–96 brought into force, on 1 April 2012, by clause 2(2) of the Auditor Regulation Act Commencement Order 2011 (SR 2011/380).
Section 2(2): subpart 4 of Part 2 and sections 85–88 brought into force, on 1 May 2012, by clause 2(3) of the Auditor Regulation Act Commencement Order 2011 (SR 2011/380).
Section 2(4): inserted, on 28 October 2021, by section 3 of the Secondary Legislation Act 2021 (2021 No 7).
Part 1 Preliminary and key provisions
Preliminary provisions
3 Purpose
The purpose of this Act is to regulate auditors who carry out audits in respect of FMC reporting entities and to establish an independent oversight system in order to—
(a)
promote, in respect of FMC audits, quality, expertise, and integrity in the profession of auditors; and
(b)
promote the recognition of the professional status of New Zealand auditors in overseas jurisdictions.
Section 3: amended, on 1 April 2014, by section 128(1) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 3(a): amended, on 1 April 2014, by section 128(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
4 Overview
(1)
In this Act,—
(a)
this Part—
(i)
requires auditors who carry out audits of financial statements and group financial statements of FMC reporting entities, or otherwise in respect of FMC reporting entities, to hold a licence; and
(ii)
requires audit firms appointed or engaged in respect of those audits to be registered; and
(iii)
provides for other preliminary provisions, including purposes and interpretation; and
(b)
Part 2 provides for—
(i)
the issue of licences; and
(ii)
other matters relating to licences, including conditions, duration, cancellation, suspension, and appeals; and
(iii)
the registration of audit firms; and
(iv)
the register of licensed auditors and registered audit firms; and
(v)
the FMA to perform the functions referred to in section 5; and
(c)
Part 3 provides for amendments to other enactments, regulations, and transitional and other miscellaneous matters.
(2)
This section is only a guide to the general scheme and effect of this Act.
Section 4(1)(a)(i): amended, on 1 April 2014, by section 128(1) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
5 FMA’s functions under this Act
The FMA’s functions under this Act are as follows:
(a)
to issue licences to overseas auditors and to authorise the registration of overseas audit firms:
(b)
to prescribe licensing, registration, and other matters under subpart 3 of Part 2:
(c)
to grant accreditation to persons under subpart 5 of Part 2:
(d)
to monitor the audit regulatory systems of accredited bodies, report on the adequacy and effectiveness of those systems, and take action in respect of those systems that are inadequate or ineffective:
(e)
to conduct quality reviews and investigations under subparts 6 and 7 of Part 2:
(ea)
to issue directions under subpart 6A of Part 2:
(f)
to take over and perform regulatory functions under subpart 8 of Part 2:
(g)
to perform or exercise any other functions, powers, and duties conferred or imposed on it by or under this Act.
Section 5(ea): inserted, on 30 March 2025, by section 8 of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
6 Interpretation
(1)
In this Act, unless the context otherwise requires,—
accredited body means a person that is granted accreditation, or is treated as having been granted accreditation, under subpart 5 of Part 2
audit firm means a partnership or body corporate that carries on the business of providing auditing services (whether or not it provides other services)
audit regulatory systems means, in relation to an accredited body, the body’s systems and processes for performing its regulatory functions
auditing and assurance standard has the same meaning as in section 5 of the Financial Reporting Act 2013
Auditor-General has the same meaning as in section 4 of the Public Audit Act 2001
company has the same meaning as in section 2(1) of the Companies Act 1993
director has the same meaning as in section 6(1) of the Financial Markets Conduct Act 2013
disciplinary body,—
(a)
in relation to the Institute, means the Disciplinary Tribunal referred to in section 6(1)(g) of the New Zealand Institute of Chartered Accountants Act 1996:
(b)
in relation to any other accredited body, means the tribunal, committee, or other body that has been—
(i)
set up to take disciplinary action in respect of the members of the accredited body; and
(ii)
approved by the FMA to act as the disciplinary body
engagement partner or director, in respect of an FMC audit where an audit firm is acting, means the partner, director, or other person in the firm who is responsible for the audit and the performance of the audit, and for the audit report that is issued on behalf of the firm
financial statements has the same meaning as in section 6 of the Financial Reporting Act 2013
FMA means the Financial Markets Authority established under the Financial Markets Authority Act 2011
FMC audit—
(a)
means the audit of—
(i)
the financial statements or group financial statements of an FMC reporting entity that are prepared under the Financial Markets Conduct Act 2013; or
(ii)
the financial statements of a scheme or a fund prepared under section 461A of the Financial Markets Conduct Act 2013; or
(iii)
the financial statements referred to in section 461B of the Financial Markets Conduct Act 2013; and
(b)
includes any audit or review required to be carried out under the regulations made, or exemptions granted, under the Financial Markets Conduct Act 2013 by a qualified FMC auditor (within the meaning of that Act); and
(c)
includes any audit of the financial statements or group financial statements prepared under the Financial Reporting Act 1993 in accordance with section 55 of the Financial Reporting Act 2013; and
(d)
includes any issuer audit (as defined in this Act before the commencement of this paragraph); but
(e)
does not include any audit carried out under the Public Audit Act 2001 (whether the Auditor-General or any other person is acting as the auditor)
FMC reporting entity—
(a)
has the same meaning as in section 6(1) of the Financial Markets Conduct Act 2013; and
(b)
includes a person to which section 55 of the Financial Reporting Act 2013 applies; and
(c)
includes any issuer (as defined in this Act before the commencement of this paragraph)
group financial statements has the same meaning as in section 7 of the Financial Reporting Act 2013
Institute means the New Zealand Institute of Chartered Accountants constituted under the New Zealand Institute of Chartered Accountants Act 1996
licensed auditor means a person who holds, or is treated as holding, a licence
limited partnership means—
(a)
a limited partnership that is registered under section 51 of the Limited Partnerships Act 2008; or
(b)
an overseas limited partnership within the meaning of the Limited Partnerships Act 2008
Minister means the Minister of the Crown who, under the authority of any warrant or with the authority of the Prime Minister, is for the time being responsible for the administration of this Act
member means, in relation to an accredited body, a person to whom the accredited body has issued a licence
overseas audit firm means an audit firm that is—
(a)
a partnership where a majority of the partners are ordinarily resident in a country, state, or territory outside New Zealand; or
(b)
an overseas company
overseas auditor means a person who is entitled to act as an auditor in a country, state, or territory outside New Zealand that is prescribed for the purposes of this definition
overseas company means a body corporate that is incorporated outside New Zealand
prescribed minimum standards means the prescribed minimum standards for the issue of a licence or for the registration of an audit firm (as the case may be) prescribed under subpart 3 of Part 2
quality review means a quality review under subpart 6 of Part 2
register means the register kept under subpart 4 of Part 2
registered audit firm means an audit firm that is, or is treated as being, registered under subpart 2 of Part 2
Registrar means the Registrar of Companies appointed in accordance with section 357(1) of the Companies Act 1993
regulatory function includes any of the following functions that are performed by an accredited body or any committee or disciplinary body of an accredited body (to the extent that those functions relate to, or are in connection with, persons who apply for, hold, or have held a licence or audit firms that apply to be, or are, registered or have been registered):
(a)
considering applications for licences, issuing licences, and setting conditions of licences:
(b)
considering applications for the registration of audit firms and setting conditions of registration:
(c)
adopting, implementing, and monitoring codes of ethics:
(d)
monitoring compliance with auditing and assurance standards:
(e)
promoting, monitoring, and reviewing the ongoing competence of members:
(f)
inquiring into the conduct of members and audit firms:
(g)
investigating complaints against members, audit firms, and former members:
(h)
hearing complaints about, and taking disciplinary action against, its members and former members and audit firms:
(i)
dealing with appeals from decisions of the disciplinary body.
(2)
In this Act, unless the context otherwise requires, audit regulatory systems are adequate and effective if they are designed and operate in a manner that—
(a)
promotes, in respect of FMC audits, quality, expertise, and integrity in the profession of auditors; and
(b)
promotes the recognition of the professional status of New Zealand auditors in overseas jurisdictions.
(3)
In this Act, unless the context otherwise requires, a person is ordinarily resident in a country, state, or territory if that person—
(a)
is domiciled in the country, state, or territory; or
(b)
is living in the country, state, or territory and the place where that person usually lives is, and has been for the immediately preceding 12 months, in the country, state, or territory, whether or not that person has on occasions been away from the country, state, or territory during that period.
Section 6(1) auditing and assurance standard: replaced, on 1 April 2014, by section 126 of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 6(1) company: inserted, on 1 July 2015, by section 4(5) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 6(1) director: amended, on 1 December 2014, by section 150 of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).
Section 6(1) engagement partner: repealed, on 1 July 2015, by section 4(1) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 6(1) engagement partner or director: inserted, on 1 July 2015, by section 4(1) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 6(1) engagement partner or director: amended, on 1 July 2015, by section 4(2) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 6(1) financial statements: replaced, on 1 April 2014, by section 126 of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 6(1) FMC audit: inserted, on 1 April 2014, by section 126 of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 6(1) FMC audit paragraph (b): amended, on 30 March 2025, by section 106(1) of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
Section 6(1) FMC reporting entity: inserted, on 1 April 2014, by section 126 of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 6(1) group financial statements: replaced, on 1 April 2014, by section 126 of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 6(1) issuer: repealed, on 1 April 2014, by section 126 of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 6(1) issuer audit: repealed, on 1 April 2014, by section 126 of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 6(1) limited partnership paragraph (b): replaced, on 1 July 2015, by section 4(3) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 6(1) overseas audit firm: replaced, on 1 July 2015, by section 4(4) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 6(1) overseas company: inserted, on 1 July 2015, by section 4(5) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 6(2)(a): amended, on 1 April 2014, by section 128(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
7 Act binds the Crown
This Act binds the Crown.
7A Transitional, savings, and related provisions
The transitional, savings, and related provisions set out in Schedule 1 have effect according to their terms.
Section 7A: inserted, on 30 March 2025, by section 9 of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
Key provisions
8 Auditors in respect of FMC audits must be licensed
(1)
Every natural person who acts as the auditor in respect of an FMC audit must hold a licence that—
(a)
authorises the person to act as the auditor in respect of that kind of FMC audit; and
(b)
is recorded in the register.
(2)
A person who acts as the auditor in respect of an FMC audit in breach of subsection (1) commits an offence and is liable on conviction to a fine not exceeding $50,000.
Section 8 heading: amended, on 1 April 2014, by section 128(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 8(1): amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 8(1)(a): amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 8(2): amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 8(2): amended, on 1 July 2013, by section 413 of the Criminal Procedure Act 2011 (2011 No 81).
9 Audit firms engaged or appointed to act as auditor in respect of FMC audits must be registered
(1)
An audit firm must not accept an engagement or appointment to act as the auditor in respect of an FMC audit unless it is a registered audit firm.
(2)
If an audit firm is engaged or appointed to act as the auditor in respect of an FMC audit, the audit firm must ensure that each engagement partner or director is a licensed auditor whose licence authorises him or her to act as the auditor in respect of that kind of FMC audit.
(2A)
If an audit firm that is a partnership is engaged or appointed to act as the auditor in respect of an FMC audit, each partner of the audit firm, from time to time, who is a licensed auditor and whose licence authorises him or her to act as the auditor in respect of that kind of FMC audit must, for the purposes of this Act, be treated as acting as the auditor in respect of the FMC audit.
(2B)
If an audit firm that is a company or an overseas company is engaged or appointed to act as the auditor in respect of an FMC audit, the company or overseas company must, for the purposes of this Act, be treated as acting as the auditor in respect of the FMC audit.
(2C)
Nothing in this section or section 10 limits the power of the Institute or any other accredited body to make, maintain, and enforce any rules relating to the investigation and hearing of complaints against, and disciplining of, a member or former member in connection with the carrying out of an audit (for example, if a company is treated as acting as the auditor, a director or an employee of that company may be subject to disciplinary action in respect of the audit).
(3)
If an audit firm breaches subsection (1) or (2), every partner or director of the audit firm commits an offence and is liable on conviction to a fine not exceeding $50,000 if—
(a)
the breach took place with his or her authority, permission, or consent; or
(b)
he or she could reasonably have known that the breach was to be or was being made and failed to take all reasonable steps to prevent or stop it.
Section 9 heading: amended, on 1 April 2014, by section 128(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 9(1): amended, on 1 July 2015, by section 5(1) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 9(1): amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 9(2): replaced, on 1 July 2015, by section 5(2) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 9(2A): inserted, on 1 July 2015, by section 5(2) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 9(2B): inserted, on 1 July 2015, by section 5(2) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 9(2C): inserted, on 1 July 2015, by section 5(2) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 9(3): amended, on 1 July 2015, by section 5(3) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 9(3): amended, on 1 July 2013, by section 413 of the Criminal Procedure Act 2011 (2011 No 81).
10 Partners or directors who are responsible if FMC audit not carried out in accordance with requirements
(1)
Subsection (2) applies if a registered audit firm is engaged or appointed to act as the auditor in respect of an FMC audit and that FMC audit is not being, or has not been, carried out—
(a)
in accordance with this Act or any other enactment that relates to the conduct of an FMC audit; or
(b)
in accordance with auditing and assurance standards; or
(c)
otherwise with reasonable care, diligence, and skill.
(2)
Despite section 9(2A) and (2B), a partner or director of the registered audit firm may have his or her licence cancelled under section 20(1)(c) or suspended under section 21(1)(b), or be subject to an order under section 78, in relation to the failure to carry out the FMC audit in accordance with the matters referred to in subsection (1)(a) or (b) or otherwise with reasonable care, diligence, and skill if, and only if,—
(a)
he or she was the engagement partner or director in respect of the FMC audit; or
(b)
the failure took place with his or her authority, permission, or consent; or
(c)
he or she could reasonably have known of the failure and failed to take all reasonable steps to prevent or stop it.
(3)
For the purposes of subsection (2), sections 20(1)(c) and 21(1)(b) apply as if the FMC audit is carried out by the partner or director to which subsection (2)(a), (b), or (c) applies.
Section 10 heading: amended, on 1 July 2015, by section 6(1) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 10 heading: amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 10(1): amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 10(1)(a): amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 10(2): amended, on 1 July 2015, by section 6(2) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 10(2): amended, on 1 July 2015, by section 6(3) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 10(2): amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 10(2)(a): amended, on 1 July 2015, by section 6(4) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 10(2)(a): amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 10(3): inserted, on 1 July 2015, by section 6(5) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
10A Licence and registration requirements do not apply if FMA exemption applies
Sections 8 and 9 do not apply to an FMC audit if—
(a)
the FMA has granted an exemption under the Financial Markets Conduct Act 2013 that applies in relation to the FMC audit; and
(b)
the effect of the exemption is that, for the purposes of that Act, the FMC audit is not required to be carried out by a qualified FMC auditor (within the meaning of that Act); and
(c)
the terms and conditions of the exemption are complied with.
Section 10A: inserted, on 1 April 2014, by section 150 of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).
Section 10A: amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 10A(a): amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 10A(b): amended, on 30 March 2025, by section 106(1) of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
Section 10A(b): amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Part 2 Licences, registration, accreditation, and role of FMA
Subpart 1—Licences
Issue of licences by accredited bodies
11 Licences issued by accredited bodies
(1)
An accredited body may, on an application made by a natural person, issue a licence to the person if the accredited body is satisfied that the person—
(a)
meets the prescribed minimum standards; and
(b)
is otherwise a fit and proper person to hold a licence.
(2)
The application must be accompanied by payment of the prescribed registration fee (which the accredited body must either send to the Registrar under section 14(1)(c) or refund to the applicant if the licence is not issued).
Issue of licences by FMA to overseas auditors
12 Licences issued by FMA to overseas auditors
(1)
The FMA may, on an application made by a natural person, issue a licence to the person if the FMA is satisfied that—
(a)
the person is an overseas auditor; and
(b)
the person meets the prescribed minimum standards; and
(c)
the person is required, under the law or the regulatory requirements of the person’s home jurisdiction, to comply with requirements for maintaining the person’s ongoing competence, and that those requirements are equivalent to, or as satisfactory as, the requirements under section 18; and
(d)
the person’s practice is subject to review arrangements that are equivalent to, or as satisfactory as, the quality review arrangements under subpart 6; and
(e)
the systems, policies, and procedures of the person’s practice are satisfactory in terms of—
(i)
promoting compliance with the requirements imposed by or under this Act and other enactments that relate to the conduct of FMC audits; and
(ii)
promoting compliance with auditing and assurance standards; and
(iii)
otherwise promoting reasonable care, diligence, and skill in the carrying out of FMC audits; and
(f)
the person is otherwise a fit and proper person to hold a licence.
(2)
In subsection (1), home jurisdiction, in relation to a person, means the country, state, or territory outside New Zealand in which the person is—
(a)
ordinarily resident; and
(b)
entitled to act as an auditor.
(3)
Applications under subsection (1) must be—
(a)
made in the manner that is specified by the FMA; and
(b)
accompanied by payment of the prescribed fee for the application (if any); and
(c)
accompanied by payment of the prescribed registration fee (which the FMA must either send to the Registrar under section 14(1)(c) or refund to the applicant if the licence is not issued).
(4)
Every applicant under subsection (1) must provide to the FMA the information that is required by the FMA to assist it in determining the application.
(5)
This section does not prevent a licence from being issued to an overseas auditor under section 11.
Section 12(1)(e)(i): amended, on 1 April 2014, by section 128(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 12(1)(e)(iii): amended, on 1 April 2014, by section 128(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
13 Person that holds licence under section 12 must notify FMA of relevant changes
(1)
Every person who holds a licence under section 12 must give written notice to the FMA of any relevant change within 10 working days after the person first became aware of the change.
(2)
In this section, relevant change—
(a)
means, in relation to a person, a change in the circumstances of the person that result in the person no longer—
(i)
being an overseas auditor; or
(ii)
meeting the prescribed minimum standards; or
(iii)
being required to comply with the requirements referred to in section 12(1)(c); and
(b)
includes any change that may be prescribed.
(3)
Every person who fails to comply with this section commits an offence and is liable on conviction to a fine not exceeding $10,000.
Section 13(3): amended, on 1 July 2013, by section 413 of the Criminal Procedure Act 2011 (2011 No 81).
Licence details to be sent to Registrar
14 Accredited body or FMA must send licence details to Registrar
(1)
An accredited body or the FMA must, after issuing a licence to a person, send to the Registrar notification of the issue of the licence together with—
(a)
the relevant information referred to in section 41(1); and
(b)
any other prescribed information; and
(c)
the prescribed registration fee.
(2)
After receiving the notification and information under subsection (1), the Registrar must enter the relevant information in respect of the licence and the licensed auditor in the register.
Conditions
15 Licence subject to conditions
(1)
A licence issued to a person by an accredited body or the FMA—
(a)
must be subject to any applicable conditions of the kinds prescribed under section 32(1)(b)(i); and
(b)
may be subject to any other conditions of a kind prescribed under section 32(1)(b)(ii) that the accredited body or the FMA thinks fit; and
(c)
must specify a condition relating to the kinds of FMC audits in respect of which the person is authorised to act under the licence.
(2)
The condition under subsection (1)(c) may specify that the person is authorised to act in respect of all kinds of FMC audits.
(3)
The accredited body or the FMA may, at any time after the licence is issued, vary, remove, add to, or substitute any conditions of the licence.
(4)
The accredited body or the FMA must not exercise a power referred to in subsection (3) unless—
(a)
the accredited body or the FMA gives the licensed auditor at least 10 working days’ written notice of the following matters before it exercises the power:
(i)
that the accredited body or the FMA may exercise a power under subsection (3); and
(ii)
the reasons why it is considering exercising that power; and
(b)
the accredited body or the FMA gives the licensed auditor or his or her representative an opportunity to make written submissions on the matter within that notice period.
Section 15(1)(c): amended, on 1 April 2014, by section 128(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 15(2): amended, on 1 April 2014, by section 128(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
16 FMA must have regard to limits on overseas auditors
The FMA must, in considering what conditions to impose under section 15(1)(c) in respect of an overseas auditor, have regard to any limitations on the overseas auditor’s ability to act in respect of an audit that are imposed by or in relation to any certificate, registration, licence, or other authorisation that entitles the overseas auditor to act as an auditor in a country, state, or territory outside New Zealand.
Duration of licence
17 Duration of licence
(1)
A licence must specify the date of its expiry (the expiry date).
(2)
The expiry date must not be later than 5 years after the date of the issue of the licence.
(3)
A licence continues in force until the close of the expiry date unless sooner suspended or cancelled under this Act.
(4)
If a licensed auditor applies for a new licence before the expiry date of an existing licence that the new licence is intended to supersede, and the application is not disposed of before the expiry date, the existing licence continues in force until the application is disposed of.
Ongoing competence requirements
18 Ongoing competence requirements
(1)
An accredited body must, in accordance with the requirements prescribed under section 32(1)(c),—
(a)
require its members to complete competence programmes to maintain their ongoing competence; and
(b)
otherwise promote, monitor, and review the ongoing competence of its members.
(2)
Every member must comply with the requirements under subsection (1)(a).
(3)
Any competence programme may require a member to do 1 or more of the following, within the period, or at the intervals, prescribed in the programme:
(a)
pass an examination or assessment (or both):
(b)
complete a period of practical training:
(c)
complete a period of practical experience:
(d)
undertake a course of studies:
(e)
anything else that the accredited body considers appropriate.
19 Unsatisfactory results of competence programme
(1)
If any member who is required to complete a competence programme does not satisfy the requirements of the programme, the accredited body may—
(a)
vary, remove, add to, or substitute any conditions of the member’s licence under section 15; or
(b)
suspend the member’s licence under section 21.
(2)
This section does not limit sections 15 and 21.
Cancellation and suspension of licences
20 Cancellation of licences
(1)
A relevant authority may cancel a licence issued to a person—
(a)
if the person, by written notice, requests that the relevant authority do so; or
(b)
if the relevant authority is satisfied on reasonable grounds that—
(i)
the person has died; or
(ii)
the person obtained the licence by making a false or misleading representation or declaration (whether oral or written); or
(iii)
the person does not satisfy, or no longer satisfies, the prescribed minimum standards; or
(iv)
the person has failed to comply with a condition of the licence; or
(v)
the person has failed to comply with section 13, 85(3), or 86(3); or
(vi)
the person is otherwise not a fit and proper person to hold a licence; or
(c)
if the relevant authority is satisfied on reasonable grounds that 1 or more FMC audits carried out by the person are not being, or have not been, carried out—
(i)
in accordance with this Act or any other enactment that relates to the conduct of an FMC audit; or
(ii)
in accordance with auditing and assurance standards; or
(iii)
otherwise with reasonable care, diligence, and skill.
(2)
In this section and sections 21 and 22, relevant authority means,—
(a)
in the case of a licence issued under section 11, either or both of the following:
(i)
the accredited body that issued the licence:
(ii)
a disciplinary body in accordance with subsection (3); or
(b)
in the case of a licence issued under section 12, the FMA.
(3)
The rules of an accredited body may authorise a disciplinary body to act under this section or section 21 and provide for any other reasonable matters, not inconsistent with this Act, in respect of the exercise of that power to act.
(4)
A licence may also be—
(a)
treated as cancelled under section 61:
(b)
cancelled by the FMA under subpart 6A or 7.
Section 20(1)(c): amended, on 1 April 2014, by section 128(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 20(1)(c)(i): amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 20(4)(b): amended, on 30 March 2025, by section 10 of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
21 Suspension of licences
(1)
A relevant authority may suspend a licence issued to a person if the relevant authority is satisfied on reasonable grounds—
(a)
that the person—
(i)
has failed to comply with a condition of the licence; or
(ii)
has failed to comply with section 13, 85(3), or 86(3); or
(iii)
has not satisfied the requirements of a competence programme that he or she is required to complete (in the case of a licence issued under section 11) or has failed to comply with the requirements referred to in section 12(1)(c) (in the case of a licence issued under section 12); or
(b)
that 1 or more FMC audits carried out by the person are not being, or have not been, carried out—
(i)
in accordance with this Act or any other enactment that relates to the conduct of an FMC audit; or
(ii)
in accordance with auditing and assurance standards; or
(iii)
otherwise with reasonable care, diligence, and skill.
(2)
A suspension under subsection (1) is for the period that the relevant authority thinks fit or until the person satisfies any requirements specified by the relevant authority.
(3)
If a person’s licence is suspended, the person is not a licensed auditor during the period for which the licence is suspended (but this does not prevent the Registrar from including information in the register in relation to the person).
(4)
At the end of the period of suspension, the person’s licence is immediately revived (unless there is some other ground to suspend or cancel the licence).
(5)
A licence may also be—
(a)
treated as suspended under section 61:
(b)
suspended by the FMA under subpart 6A or 7.
Section 21(1)(b): amended, on 1 April 2014, by section 128(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 21(1)(b)(i): amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 21(5)(b): amended, on 30 March 2025, by section 11 of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
22 Procedure relating to exercise of cancellation or suspension powers
(1)
A relevant authority must not cancel a licence under section 20(1)(b)(ii) to (vi) or (c) or suspend a licence under section 21(1) unless—
(a)
the relevant authority gives the licensed auditor at least 10 working days’ written notice of the following matters before it exercises the power:
(i)
that the relevant body may cancel or suspend the licence; and
(ii)
the reasons why it is considering exercising that power; and
(b)
the relevant authority gives the licensed auditor or his or her representative an opportunity to make written submissions and to be heard on the matter within that notice period.
(2)
The relevant authority must give notice of the cancellation or suspension to—
(a)
the licensed auditor; and
(b)
the Registrar.
(3)
The notice given to the licensed auditor must include a statement of the grounds for the cancellation or suspension.
23 FMA may authorise person to continue to act in respect of FMC audit despite cancellation or suspension of licence
(1)
This section applies if—
(a)
a person’s licence is cancelled or suspended; and
(b)
the person is acting, or has been appointed to act, as the auditor in respect of an FMC audit at the time that the licence is cancelled or suspended.
(2)
The FMA may, on an application made under subsection (4), authorise the person whose licence is cancelled or suspended to act, or to continue to act, as the auditor in respect of the FMC audit referred to in subsection (1)(b).
(3)
The FMA may act under subsection (2) only if the FMA is satisfied that the FMC audit will be carried out—
(a)
in accordance with—
(i)
this Act and any other enactment that relates to the conduct of the FMC audit; and
(ii)
auditing and assurance standards; and
(b)
otherwise with reasonable skill, diligence, and care.
(4)
An application—
(a)
may be made only by the FMC reporting entity in respect of the FMC audit referred to in subsection (1)(b); and
(b)
must otherwise be made in the manner that is specified by the FMA; and
(c)
must be accompanied by payment of the prescribed fee for the application (if any).
(5)
The authorisation may be subject to the terms and conditions that the FMA thinks fit.
(6)
A person who acts, or continues to act, as the auditor in respect of an FMC audit in accordance with the terms and conditions of an authorisation does not commit an offence under section 8.
Section 23 heading: amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 23(1)(b): amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 23(2): amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 23(3): amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 23(3)(a)(i): amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 23(4)(a): amended, on 1 April 2014, by section 126 of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 23(6): amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Appeals in respect of licensing and related matters
24 Appeals in respect of licensing and related matters
(1)
A person may appeal to the District Court against any decision of an accredited body or the FMA to—
(a)
decline to issue a licence to the person; or
(b)
include conditions under section 15(1)(b) or (c) on the person’s licence or proposed licence (or to act under section 15(3)); or
(c)
suspend or cancel his or her licence; or
(d)
decline to act on an application made by the person under section 23 (or to include terms and conditions on an authorisation following such an application); or
(e)
issue a direction to the person under subpart 6A; or
(f)
make any other order under subpart 6A or 7 in respect of the person.
(2)
A person may appeal to the District Court against any decision of a disciplinary body to cancel or suspend his or her licence unless the rules of the accredited body provide for an appeal against the decision to a body established to hear appeals against the decision (for example, the Appeals Council referred to in section 6(1)(h) of the New Zealand Institute of Chartered Accountants Act 1996).
(3)
An appeal to the District Court under this section must be brought—
(a)
in accordance with the rules of court; and
(b)
within 20 working days after notice of the decision is communicated to the appellant, or within any further time a District Court Judge allows on application made before or after the period expires.
Section 24(1): amended, on 1 March 2017, by section 261 of the District Court Act 2016 (2016 No 49).
Section 24(1)(e): amended, on 30 March 2025, by section 12 of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
Section 24(1)(f): amended, on 30 March 2025, by section 12 of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
Section 24(2): amended, on 1 March 2017, by section 261 of the District Court Act 2016 (2016 No 49).
Section 24(3): amended, on 1 March 2017, by section 261 of the District Court Act 2016 (2016 No 49).
Subpart 2—Registration of audit firms
25 Accredited body may authorise registration of audit firms
(1)
An accredited body may, on an application made by an audit firm that is a partnership or a company, authorise the Registrar to register the audit firm if the accredited body is satisfied that,—
(a)
in the case of a partnership,—
(i)
1 or more of the partners of the firm are licensed auditors; and
(ii)
the firm meets the prescribed minimum standards:
(b)
in the case of a company,—
(i)
1 or more of the directors of the firm are licensed auditors; and
(ii)
the firm meets the prescribed minimum standards; and
(iii)
the firm satisfies the requirements prescribed for the purposes of this subparagraph.
(2)
A limited partnership may not apply under subsection (1) (and may not be a registered audit firm).
(3)
The application must be accompanied by payment of the prescribed registration fee (which the accredited body must either send to the Registrar under section 27(1)(c) or refund to the audit firm if it is not registered).
Section 25(1): replaced, on 1 July 2015, by section 7 of the Auditor Regulation Amendment Act 2014 (2014 No 62).
26 FMA may authorise registration of overseas audit firms
(1)
The FMA may, on an application made by an overseas audit firm, authorise the Registrar to register the audit firm if the FMA is satisfied that—
(a)
in the case of a partnership, 1 or more of the partners of the firm are licensed auditors; and
(ab)
in the case of an overseas company,—
(i)
1 or more of the directors of the firm are licensed auditors; and
(ii)
the firm is eligible to act as an auditor in the country, State, or territory in which it is incorporated; and
(iii)
the firm is required, under the law or the regulatory requirements of the country, State, or territory in which it is incorporated, to comply with requirements for maintaining the firm’s independence as an auditor, and that those requirements are equivalent to, or as satisfactory as, the requirements that apply to New Zealand auditors; and
(iv)
the firm satisfies the requirements prescribed for the purposes of this subparagraph; and
(b)
the firm is subject to review arrangements that are equivalent to, or as satisfactory as, the quality review arrangements under subpart 6; and
(c)
the systems, policies, and procedures of the firm are satisfactory in terms of—
(i)
promoting compliance with the requirements imposed by or under this Act and other enactments that relate to the conduct of FMC audits; and
(ii)
promoting compliance with auditing and assurance standards; and
(iii)
otherwise promoting reasonable care, diligence, and skill in the carrying out of FMC audits; and
(d)
the firm meets the prescribed minimum standards.
(2)
A limited partnership may not apply under subsection (1) (and may not be a registered audit firm).
(3)
The application must be accompanied by payment of the prescribed registration fee (which the FMA must either send to the Registrar under section 27(1)(c) or refund to the audit firm if it is not registered).
Section 26(1)(a): replaced, on 1 July 2015, by section 8 of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 26(1)(ab): inserted, on 1 July 2015, by section 8 of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 26(1)(c)(i): amended, on 1 April 2014, by section 128(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 26(1)(c)(iii): amended, on 1 April 2014, by section 128(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
27 Registration of audit firm
(1)
An accredited body or the FMA (as the case may be) must, after deciding to authorise the registration of an audit firm, send to the Registrar notification of that decision together with—
(a)
the relevant information referred to in section 41(2); and
(b)
any other prescribed information; and
(c)
the prescribed registration fee.
(2)
After receiving the notification and information under subsection (1), the Registrar must register the audit firm and enter the relevant information in respect of the registration in the register.
(3)
For the purposes of this subpart, the relevant body, in respect of a registered audit firm, is the accredited body or the FMA (as the case may be) that gave the notification under subsection (1).
28 Registration subject to conditions
(1)
The registration of an audit firm is subject to any conditions that the relevant body thinks fit.
(2)
The relevant body may, at any time after the audit firm is registered, vary, remove, add to, or substitute any conditions of registration.
29 Cancellation or suspension of registration
(1)
The relevant body may give notice to the Registrar to cancel or suspend the registration of a registered audit firm if the relevant body is satisfied on reasonable grounds that the audit firm—
(a)
no longer has at least 1 partner or director who is a licensed auditor; or
(b)
obtained the registration by making a false or misleading representation or declaration (whether oral or written); or
(c)
no longer meets the prescribed minimum standards; or
(ca)
no longer satisfies the requirements prescribed for the purposes of section 25(1)(b)(iii) or 26(1)(ab)(iv); or
(cb)
no longer satisfies the requirements of section 26(1)(ab)(ii) or (iii) (in the case of an overseas company); or
(d)
has failed to comply with a condition of its registration; or
(e)
has failed to comply with a direction issued under subpart 6A; or
(f)
has failed to comply with section 87(6).
(2)
A suspension under subsection (1) is for the period that the relevant body thinks fit or until the audit firm satisfies any requirements specified by the relevant body (and that period or those requirements must be specified in the notice given under subsection (1)).
(3)
After receiving a notification under subsection (1), the Registrar must—
(a)
cancel or suspend the registration of the audit firm; and
(b)
give written notice of the cancellation or suspension to the audit firm.
(4)
The Registrar must, after receiving notification of an order under subpart 7 of the cancellation or suspension of the registration of an audit firm, cancel or suspend the registration of the audit firm.
(5)
The registration of an audit firm may also be treated as cancelled or suspended under section 61(6).
Section 29 heading: amended, on 1 July 2015, by section 9(1) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 29(1): amended, on 1 July 2015, by section 9(2) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 29(1)(a): replaced, on 1 July 2015, by section 9(3) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 29(1)(ca): inserted, on 1 July 2015, by section 9(4) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 29(1)(cb): inserted, on 1 July 2015, by section 9(4) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 29(1)(e): amended, on 30 March 2025, by section 13 of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
Section 29(2): replaced, on 1 July 2015, by section 9(5) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 29(3): inserted, on 1 July 2015, by section 9(5) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 29(4): inserted, on 1 July 2015, by section 9(5) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 29(5): inserted, on 1 July 2015, by section 9(5) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
30 Relevant body must give notice before exercising power
The relevant body must not exercise a power referred to in section 28(2) or 29 unless—
(a)
the relevant body gives the audit firm (or at least 1 of the partners or directors of the firm) at least 10 working days’ written notice of the following matters before it exercises the power:
(i)
that the relevant body may exercise a power under section 28(2) or 29 (as the case may be); and
(ii)
the reasons why it is considering exercising that power; and
(b)
the relevant body gives the audit firm or a representative of the audit firm an opportunity to make written submissions on the matter within that notice period.
Section 30(a): amended, on 1 July 2015, by section 10 of the Auditor Regulation Amendment Act 2014 (2014 No 62).
31 Appeals in respect of registration matters
(1)
An audit firm may appeal to the District Court against any decision of an accredited body or the FMA to—
(a)
decline to authorise the registration of the firm; or
(b)
include conditions under section 28 on the firm’s registration (or to act under section 28(2)); or
(c)
give notice to the Registrar to cancel or suspend the firm’s registration.
(2)
An appeal to the District Court under this section must be brought—
(a)
in accordance with the rules of court; and
(b)
within 20 working days after notice of the decision is communicated to the appellant, or within any further time a District Court Judge allows on application made before or after the period expires.
Section 31(1): amended, on 1 March 2017, by section 261 of the District Court Act 2016 (2016 No 49).
Section 31(1)(c): amended, on 1 July 2015, by section 11 of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 31(2): amended, on 1 March 2017, by section 261 of the District Court Act 2016 (2016 No 49).
Subpart 3—FMA may prescribe licensing, registration, and other matters
32 FMA may prescribe licensing, registration, and other matters
(1)
The FMA may, by notice,—
(a)
prescribe the minimum standards for licensing (including standards relating to required competence, qualifications, and experience) that a person must meet in order to be issued with a licence by an accredited body or the FMA; and
(b)
prescribe the kinds of conditions to which licences—
(i)
must be subject; and
(ii)
may be subject if the accredited body or the FMA thinks fit; and
(c)
prescribe requirements for ongoing competence that must be complied with by persons who are issued with a licence under section 11; and
(d)
prescribe the minimum standards for registration of an audit firm that an audit firm must meet in order to be registered as a registered audit firm; and
(e)
prescribe the minimum standards for accreditation (including standards relating to the adequacy and effectiveness of audit regulatory systems) that a person must meet in order to be granted accreditation by the FMA; and
(f)
prescribe the procedure that accredited bodies must follow when performing regulatory functions; and
(g)
prescribe transitional requirements for the purposes of subpart 3 of Part 3 (including requirements relating to required competence, qualifications, and experience and, in the case of audit firms, requirements relating to the firm’s systems, policies, and procedures).
(2)
Matters prescribed under subsection (1) may—
(a)
have general or specific application:
(b)
differ according to differences in time or circumstance.
(3)
A notice under this section is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).
| Legislation Act 2019 requirements for secondary legislation made under this section | ||||
| Publication | The maker must: | LA19 ss 73, 74(1)(a), Sch 1 cl 14 | ||
| • publish it in the Gazette | ||||
| • ensure that an up to date copy of it is published on a website maintained by, or on behalf of, the FMA | ||||
| • ensure that an up to date copy of it is made available at the FMA’s head office for inspection free of charge and purchase for a reasonable fee | ||||
| The Ministry of Foreign Affairs and Trade considers that the secondary legislation may have international transparency obligations under the CPTPP. As a result the maker may also have to comply with s 75 of the Legislation Act 2019 | LA19 ss 74(2), 75 | |||
| Presentation | The Minister must present it to the House of Representatives | LA19 s 114, Sch 1 cl 32(1)(a) | ||
| Disallowance | It may be disallowed by the House of Representatives | LA19 ss 115, 116 | ||
| This note is not part of the Act. | ||||
33 Minimum standards for licence
(1)
A notice under section 32 may prescribe minimum standards for licensing in any way the FMA thinks fit, including in 1 or more of the following ways:
(a)
by requiring a degree or diploma or certificate of a stated kind recognised by the FMA:
(b)
by requiring the successful completion of a degree, course of studies, or programme recognised by the FMA:
(c)
by requiring a pass in a specified examination or any other assessment:
(d)
by reference to registration with, a licence issued by, or other authorisation from an overseas organisation:
(e)
by requiring experience in the provision of services of a particular kind:
(f)
by requiring a certain level of competence.
(2)
The FMA may recognise any overseas qualification, certificate, registration, or licence as satisfying a particular minimum standard for licensing (in whole or in part) if, in the opinion of the FMA, that overseas qualification, certificate, registration, or licence is equivalent to, or as satisfactory as, the standard, or part of the standard, that is treated as being satisfied.
34 Minimum standards for registration of audit firm
(1)
A notice under section 32 may prescribe minimum standards for the registration of an audit firm in any way the FMA thinks fit, including prescribing requirements relating to the firm’s systems, policies, and procedures that relate to—
(a)
promoting compliance with—
(i)
the requirements imposed by or under this Act and other enactments that relate to the conduct of FMC audits; and
(ii)
auditing and assurance standards; and
(b)
otherwise promoting reasonable care, diligence, and skill in the carrying out of FMC audits.
(2)
The FMA may recognise any overseas certificate, registration, licence, or other authorisation as satisfying a particular minimum standard for the registration of an audit firm (in whole or in part) if, in the opinion of the FMA, that overseas certificate, registration, licence, or authorisation is equivalent to, or as satisfactory as, the standard, or part of the standard, that is treated as being satisfied.
(3)
Nothing in regulations made under section 84(1)(ca) limits the FMA’s power to prescribe minimum standards for the registration of an audit firm.
Section 34(1)(a)(i): amended, on 1 April 2014, by section 128(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 34(1)(b): amended, on 1 April 2014, by section 128(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 34(3): inserted, on 1 July 2015, by section 12 of the Auditor Regulation Amendment Act 2014 (2014 No 62).
35 Principles guiding prescribing of licensing, registration, and other matters
In prescribing matters under this subpart, the FMA must be guided by the following principles:
(a)
the matters must be necessary or desirable to—
(i)
promote, in respect of FMC audits, quality, expertise, and integrity in the profession of auditors; or
(ii)
promote the recognition of the professional status of New Zealand auditors in overseas jurisdictions; or
(iii)
carry out, give effect to, or provide for a matter that is incidental to, or consequential on, the matters relating to subparagraph (i) or (ii); and
(b)
the matters should not unnecessarily restrict the licensing of auditors or the registration of audit firms; and
(c)
the matters should not impose undue costs on auditors, on audit firms, or on FMC reporting entities.
Section 35(a)(i): amended, on 1 April 2014, by section 128(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 35(c): amended, on 1 April 2014, by section 128(1) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
36 FMA must consult before making notices
(1)
Before the FMA makes a notice under section 32, the FMA must consult the following about its proposal for the contents of the notice:
(a)
persons who the FMA considers are able to represent the views of auditors who carry out FMC audits (including the Institute); and
(b)
organisations—
(i)
that the FMA considers will be substantially affected by the proposal; or
(ii)
whose members the FMA considers will be substantially affected by the proposal.
(2)
A failure to comply with subsection (1) does not affect the validity of any notice under section 32.
Section 36 heading: amended, on 28 October 2021, by section 3 of the Secondary Legislation Act 2021 (2021 No 7).
Section 36(1): amended, on 28 October 2021, by section 3 of the Secondary Legislation Act 2021 (2021 No 7).
Section 36(1)(a): amended, on 1 April 2014, by section 128(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
37 Other provisions relating to notices under section 32
[Repealed]Section 37: repealed, on 28 October 2021, by section 3 of the Secondary Legislation Act 2021 (2021 No 7).
Subpart 4—Register of licensed auditors and registered audit firms
38 Register of licensed auditors and registered audit firms
The Registrar must establish and maintain, in accordance with this subpart, a register of licensed auditors and registered audit firms.
39 Operation of and access to register
(1)
The register may be kept—
(a)
as an electronic register; or
(b)
in any other manner that the Registrar thinks fit.
(2)
The register must be available for access and searching by members of the public unless suspended under subsection (3).
(3)
The Registrar may refuse access to the register or otherwise suspend the operation of the register, in whole or in part,—
(a)
if the Registrar considers that it is not practical to provide access to the register; or
(b)
for any other reason that is prescribed by regulations made under this Act.
40 Purpose of register
The purpose of the register is—
(a)
to enable any person to—
(i)
determine whether a person is a licensed auditor and, if so, the status and relevant history of the person’s licence; and
(ii)
determine whether a partnership, a company, or an overseas company is a registered audit firm and, if so, the status and relevant history of the firm’s registration; and
(iii)
choose a suitable person or audit firm to carry out an FMC audit; and
(iv)
know which licensed auditors have been disciplined within the last 7 years; and
(b)
to assist any person in the exercise of the person’s powers or the performance of the person’s functions under this Act or any other enactment.
Section 40(a)(ii): amended, on 1 July 2015, by section 13 of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 40(a)(iii): amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
41 Contents of register
(1)
The register must contain the following information about each licensed auditor (to the extent that the information is relevant):
(a)
the full name and business address of the licensed auditor; and
(b)
the name and address of the entity that has issued a licence to the licensed auditor (being either an accredited body or the FMA); and
(c)
the date of each licence that has been issued to the licensed auditor; and
(d)
the date on which each licence was recorded in the register; and
(e)
the expiry date of each licence that is currently in force (and whether the licence continues in force under section 17(4)); and
(f)
the kinds of FMC audits in respect of which the licensed auditor is authorised to act under each licence; and
(g)
the conditions placed on each licence that is currently in force; and
(h)
any suspension or cancellation of a licence that has been issued to the licensed auditor or any other action that has been taken on a disciplinary matter against the licensed auditor under this Act by an accredited body, a disciplinary body, or the FMA in the last 7 years; and
(i)
any other prescribed information.
(2)
The register must contain the following information about each registered audit firm (to the extent that the information is relevant):
(a)
the full name and business address of the firm; and
(b)
the name and address of the entity that authorised the registration of the firm (being either an accredited body or the FMA); and
(c)
the date of registration; and
(d)
the names of all of the partners, directors, and employees of the firm that are licensed auditors; and
(e)
the conditions placed on the registration that are currently in force; and
(f)
any other prescribed information.
(3)
The register may also contain—
(a)
information about former licensed auditors and former registered audit firms; and
(b)
information about licences that have been cancelled or suspended or otherwise expired in the last 7 years; and
(c)
any other information or documentation that the Registrar considers necessary or desirable for the purposes of the register.
(4)
The Registrar must remove from the register information about a former licensed auditor contained in the register under subsection (3)(a) if the last licence held by the person was cancelled or expired more than 7 years ago.
Section 41(1)(f): amended, on 1 April 2014, by section 128(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 41(2)(d): amended, on 1 July 2015, by section 14 of the Auditor Regulation Amendment Act 2014 (2014 No 62).
42 Obligation to notify Registrar of prescribed changes
(1)
Every accredited body and the FMA must give written notice to the Registrar of any prescribed changes within 10 working days after the accredited body or the FMA (as the case may be) first becomes aware of the change.
(2)
In subsection (1), prescribed changes means changes to the information included in the register that are of a kind that is prescribed for the purposes of this section.
(3)
An accredited body commits an offence if it fails to comply with this section and is liable on conviction to a fine not exceeding $30,000.
Section 42(3): amended, on 1 July 2013, by section 413 of the Criminal Procedure Act 2011 (2011 No 81).
43 Annual confirmation by accredited bodies and FMA
(1)
Every accredited body and the FMA must ensure that the Registrar receives each year, during the month allocated to the body or the FMA for the purposes of this section, an annual confirmation.
(2)
The annual confirmation must—
(a)
be in the form (if any) required by the Registrar and be accompanied by the prescribed fee (if any); and
(b)
either—
(i)
confirm that, as at the date of the certificate, the information supplied to the Registrar in respect of the licences issued, and the registrations of audit firms authorised, by the accredited body or the FMA is correct to the best of the accredited body’s or the FMA’s knowledge; or
(ii)
contain updated information to ensure that, as at the date of the certificate, the information referred to in subparagraph (i) is correct to the best of the accredited body’s or the FMA’s knowledge; and
(c)
contain, or be accompanied by, any other prescribed information or documents.
(3)
The annual confirmation must be dated as at a day within the month during which the certificate is required to be received by the Registrar.
(4)
The Registrar must allocate a month to an accredited body and the FMA for the purposes of this section.
(5)
The Registrar may, by written notice to an accredited body or the FMA, alter the month allocated to the accredited body or the FMA under subsection (4).
44 Registrar must amend register in certain circumstances
The Registrar must amend the register if—
(a)
an accredited body or the FMA informs the Registrar of information that is different from the information entered on the register; or
(b)
an annual confirmation contains information that is different from the information entered on the register; or
(c)
the Registrar is satisfied at any time that the register contains a typographical error or a mistake, or omits information supplied to the Registrar; or
(d)
the regulations otherwise require the register to be amended.
45 Registrar may refuse to accept document
The Registrar may refuse to accept a document received by the Registrar under this Act if that document—
(a)
is not in the required form (if any); or
(b)
does not comply with prescribed requirements (if any).
46 Search of register
(1)
A person may search the register in accordance with this Act or the regulations.
(2)
The register may be searched only by reference to the following criteria:
(a)
the name, or any part of the name, of a person or audit firm:
(b)
the business address of a person or audit firm:
(c)
the name of an accredited body:
(d)
any kind of FMC audit in respect of which a licensed auditor is authorised to act under a licence:
(e)
any other prescribed criteria:
(f)
any combination of the criteria in paragraphs (a) to (e).
(3)
The register may be searched for the following purposes:
(a)
by an individual, or a person with the consent of the individual, for the purpose of searching for information about that individual in accordance with the Privacy Act 2020:
(b)
by a person for a purpose referred to in section 40.
(4)
A person who searches the register for personal information in breach of this section must be treated, for the purposes of Parts 5 and 6 of the Privacy Act 2020, as having breached an information privacy principle under section 69(2)(a)(i) of that Act.
Section 46(2)(d): amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 46(3)(a): amended, on 1 December 2020, by section 217 of the Privacy Act 2020 (2020 No 31).
Section 46(4): replaced, on 1 December 2020, by section 217 of the Privacy Act 2020 (2020 No 31).
47 Power of Registrar to delegate
(1)
The Registrar may delegate to any person, either generally or particularly, any of the Registrar’s functions, duties, and powers under this Part except the power of delegation.
(2)
A delegation—
(a)
must be in writing; and
(b)
may be made subject to any restrictions and conditions the Registrar thinks fit; and
(c)
is revocable at any time, in writing; and
(d)
does not prevent the performance or exercise of a function, duty, or power by the Registrar.
(3)
A person to whom any functions, duties, or powers are delegated may perform and exercise them in the same manner and with the same effect as if they had been conferred directly by this Part and not by delegation.
(4)
A person who appears to act under a delegation is presumed to be acting in accordance with its terms in the absence of evidence to the contrary.
Subpart 5—Accreditation
48 FMA may grant accreditation
(1)
The FMA may, on an application made by a person, grant accreditation to the person for the purposes of this Act if the FMA is satisfied that the person—
(a)
will implement and maintain audit regulatory systems that are adequate and effective; and
(b)
meets the minimum standards for the grant of accreditation prescribed under section 32(1)(e); and
(c)
is a fit and proper person to perform regulatory functions for the purposes of this Act.
(2)
Applications under subsection (1) must be—
(a)
made in the manner that is specified by the FMA; and
(b)
accompanied by payment of the prescribed fee for the application (if any).
(3)
Every applicant under subsection (1) must provide to the FMA the information that is required by the FMA to assist it in determining the application.
49 Accreditation subject to conditions
(1)
A person may be accredited as an accredited body subject to any conditions referred to in subsection (2) that the FMA thinks fit.
(2)
The conditions are—
(a)
conditions relating to the procedure that an accredited body must follow when performing regulatory functions:
(b)
conditions to ensure that the accredited body’s audit regulatory systems are adequate and effective:
(c)
any other prescribed conditions or conditions that relate to prescribed matters.
(3)
The FMA may, at any time after accreditation is granted or treated as having been granted, by written notice to any accredited body (including the Institute), vary, remove, add to, or substitute any conditions of accreditation.
50 New Zealand Institute of Chartered Accountants treated as having been granted accreditation
(1)
The Institute must be treated as having been granted accreditation under this subpart on the commencement of this section.
(2)
Subsection (1) does not prevent the FMA from—
(a)
imposing, varying, removing, adding to, or substituting any conditions of accreditation under section 49; or
(b)
cancelling or suspending the accreditation of the Institute under section 59; or
(c)
exercising or performing any other functions, powers, or duties under this Act in respect of the Institute.
51 Accredited bodies must supply annual report to FMA
(1)
Every accredited body must supply to the FMA an annual report.
(2)
The annual report must—
(a)
be supplied each year within the time, and in the manner and form, specified by the FMA by a direction under subsection (3); and
(b)
contain—
(i)
information relating to the accredited body’s performance in carrying out regulatory functions for the purposes of this Act; and
(ii)
information relating to any material changes to the accredited body’s audit regulatory systems that it has implemented, is in the process of implementing, or is considering implementing (including stating what it has done in response to any direction issued under section 56); and
(iii)
any other prescribed information.
(3)
The FMA must—
(a)
prepare a direction that specifies the time within which, and the manner and form in which, annual reports must be supplied; and
(b)
send a copy of the direction to each accredited body; and
(c)
publish the direction on an Internet site maintained by or on behalf of the FMA.
(4)
An accredited body that fails to supply an annual report in accordance with this section commits an offence and is liable on conviction to a fine not exceeding $50,000.
Section 51(4): amended, on 1 July 2013, by section 413 of the Criminal Procedure Act 2011 (2011 No 81).
52 FMA must publish plan relating to auditor regulation and oversight
(1)
The FMA must, at least once every 4 years, publish on an Internet site maintained by or on behalf of the FMA a plan relating to its intentions in relation to auditor regulation and oversight under this Act.
(2)
The plan must relate to the forthcoming financial year and 3 or more further financial years.
(3)
The plan must describe, in relation to auditor regulation and oversight,—
(a)
the specific impacts, outcomes, or objectives that the FMA seeks to achieve or contribute to; and
(b)
the ways in which the FMA expects accredited bodies to contribute to those impacts, outcomes, or objectives; and
(c)
how the FMA proposes to monitor accredited bodies under section 54.
(4)
In this section, financial year means a financial year of the FMA.
Section 52(1): amended, on 30 March 2025, by section 14(1) of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
Section 52(2): amended, on 30 March 2025, by section 14(2) of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
Section 52(4): amended, on 30 March 2025, by section 14(3) of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
53 Publication of policies
The FMA must publish on an Internet site maintained by or on behalf of the FMA its policies in relation to how it acts, or proposes to act,—
(a)
in determining applications for accreditation; and
(b)
in imposing, varying, removing, or adding to conditions of accreditation.
54 FMA must monitor audit regulatory systems
(1)
The FMA must monitor the audit regulatory systems of each accredited body in order to determine the extent to which those systems are adequate and effective.
(2)
An accredited body must give all reasonable assistance to the FMA to enable the FMA to act under subsection (1).
(3)
An accredited body commits an offence if the accredited body—
(a)
fails to comply with subsection (2); or
(b)
otherwise hinders, obstructs, or delays the FMA in acting under subsection (1).
(4)
An accredited body that commits an offence under subsection (3) is liable on conviction to a fine not exceeding $100,000.
Section 54(4): amended, on 1 July 2013, by section 413 of the Criminal Procedure Act 2011 (2011 No 81).
55 FMA must report on audit regulatory systems of each accredited body
(1)
The FMA must, at least once every 4 years, prepare a report on the extent to which the audit regulatory systems of each accredited body are adequate and effective.
(2)
[Repealed](3)
The FMA must, no later than 1 month after preparing a report under subsection (1), publish a notice in the Gazette that—
(a)
states that it has published a report on the adequacy and effectiveness of the audit regulatory systems of 1 or more accredited bodies; and
(b)
names the accredited bodies covered by the report; and
(c)
summarises any directions given under section 56 in the period covered by the report (but not the reasons); and
(d)
specifies where a copy of the report may be inspected or obtained.
(4)
The FMA must, after publishing a notice in the Gazette under subsection (3), publish a copy of the report on an Internet site maintained by or on behalf of the FMA.
(5)
This section does not prevent the FMA from preparing and publishing at any time any other reports about the extent to which the audit regulatory systems of an accredited body are adequate and effective.
Section 55(1): amended, on 30 March 2025, by section 15(1) of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
Section 55(2): repealed, on 30 March 2025, by section 15(2) of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
Section 55(3)(c): amended, on 30 March 2025, by section 15(3) of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
56 FMA may issue directions
(1)
The FMA may give a direction under this section to an accredited body if the FMA is satisfied on reasonable grounds that—
(a)
its audit regulatory systems are not adequate and effective; or
(b)
the adequacy or effectiveness of its audit regulatory systems can be improved in order to better meet the purposes of this Act; or
(c)
its audit regulatory systems are inconsistent in a material respect with the FMA’s plan under section 52.
(2)
The directions may require the accredited body, within the time and in the manner specified by the FMA in the directions, to amend its audit regulatory systems to effectively address the matters that caused the FMA to give the directions.
57 Miscellaneous matters relating to directions
A direction given under section 56 must—
(a)
be in writing; and
(b)
state the grounds on which it is given.
58 Offence to contravene directions
An accredited body that fails to comply with a direction under section 56 commits an offence and is liable on conviction to a fine not exceeding $50,000.
Section 58: amended, on 1 July 2013, by section 413 of the Criminal Procedure Act 2011 (2011 No 81).
59 FMA may suspend or cancel accreditation or censure accredited body in certain circumstances
(1)
This section applies if the FMA is satisfied on reasonable grounds that—
(a)
an accredited body has failed to—
(i)
comply with a condition of its accreditation; or
(ii)
supply an annual report in accordance with section 51; or
(iii)
comply with a direction under section 56; or
(iv)
comply with section 18, 42, 43, 54(2), or 77; or
(b)
the audit regulatory systems of an accredited body are not adequate and effective.
(2)
The FMA may do 1 or more of the following:
(a)
order that the accreditation of the accredited body be cancelled:
(b)
order that a body whose accreditation has been cancelled may not apply to be re-accredited before the expiry of a specified period:
(c)
order that the accreditation of the accredited body be suspended—
(i)
for any period that the FMA thinks fit; or
(ii)
until the body does the things specified by the FMA in order to demonstrate that accreditation should be reinstated:
(d)
censure the accredited body:
(e)
order the accredited body to pay to the FMA any sum that the FMA considers just and reasonable towards the costs and expenses of, and incidental to, the FMA’s consideration of whether an order should be made under this section:
(f)
make an order under section 61.
(3)
However, the FMA may only cancel or suspend the accreditation of an accredited body if the FMA is satisfied on reasonable grounds that—
(a)
the failure or failures referred to in subsection (1)(a) (as the case may be) are serious or persistent; or
(b)
in the case of subsection (1)(b), the audit regulatory systems of the accredited body are seriously inadequate or ineffective.
(4)
The FMA may order that an order under subsection (2)(a), (b), or (c) is to take effect immediately or at some later time.
60 Miscellaneous matters relating to orders
An order made under section 59 must—
(a)
be in writing; and
(b)
state the grounds on which it is made.
61 Effect of cancellation or suspension on licences issued and registrations authorised by accredited body or former accredited body
(1)
If the accreditation of a person (A) is—
(a)
cancelled under section 59, each licence issued by A is treated as cancelled:
(b)
suspended under section 59, each licence issued by A is treated as suspended during the period in which A’s accreditation is suspended.
(2)
The FMA may order that subsection (1) does not apply in respect of 1 or more classes of licences.
(3)
If 1 or more classes of licences issued by A continue in force as a result of an order under subsection (2), the FMA may order, on the terms and conditions that it thinks fit, that another accredited body may perform regulatory functions in respect of those licences as if the other accredited body issued those licences (and that other accredited body may be the FMA acting under section 91).
(4)
The FMA may authorise a person whose licence is suspended or cancelled under subsection (1) to act, or continue to act, in respect of an FMC audit under section 23.
(5)
Subsection (1) is subject to subsections (2) and (4).
(6)
If A was the relevant body under subpart 2 in respect of a registered audit firm,—
(a)
the registration of the audit firm must be treated as cancelled if A’s accreditation is cancelled under section 59; and
(b)
the registration of the audit firm must be treated as suspended during the period in which A’s accreditation is suspended (if A’s accreditation is suspended under section 59); but
(c)
the FMA may order that paragraph (a) or (b) does not apply in respect of 1 or more classes of audit firm.
(7)
If 1 or more classes of audit firm continue to be registered as the result of an order under subsection (6)(c), the FMA may order, on the terms and conditions that it thinks fit, that another accredited body may act as the relevant body under subpart 2 (and that other accredited body may be the FMA acting under section 91).
Section 61(4): amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 61(6): replaced, on 1 July 2015, by section 15 of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 61(7): inserted, on 1 July 2015, by section 15 of the Auditor Regulation Amendment Act 2014 (2014 No 62).
62 FMA must give opportunity to make submissions
The FMA must not exercise a power referred to in section 49(3), 56, or 59 unless—
(a)
the FMA gives the accredited body at least 10 working days’ written notice of the following matters before it exercises the power:
(i)
that the FMA may exercise a power under section 49(3), 56, or 59 (as the case may be); and
(ii)
the reasons why it is considering exercising that power; and
(b)
the FMA gives the accredited body or its representative an opportunity to make written submissions and to be heard on the matter within that notice period.
63 Appeals
(1)
A person may appeal to the High Court against any decision of the FMA—
(a)
to decline to grant accreditation to the person under this subpart; or
(b)
to include conditions under section 49 on the person’s accreditation or proposed accreditation; or
(c)
to give a direction under section 56 in respect of the person’s accreditation; or
(d)
to make an order under section 59 in respect of the person’s accreditation; or
(e)
to decline to make an order under section 61(2) or (6)(c) in respect of the person’s licence or registration.
(2)
An appeal must be brought—
(a)
in accordance with the rules of court; and
(b)
within 20 working days after notice of the decision is communicated to the appellant, or within any further time a High Court Judge allows on an application made before or after the period expires.
(3)
The High Court may make an order, or otherwise exercise a power, on an appeal under subsection (1)(e) only in respect of 1 or more of the parties to the proceedings.
Section 63(1)(e): replaced, on 1 July 2015, by section 16(1) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 63(3): inserted, on 1 July 2015, by section 16(2) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
64 Certain provisions of New Zealand Institute of Chartered Accountants Act 1996 apply to other accredited bodies
If an accredited body is not the Institute, sections 9 to 13 and 16 of the New Zealand Institute of Chartered Accountants Act 1996 apply to the accredited body with any necessary modifications in relation to persons to whom it has issued a licence as if references to—
(a)
the Professional Conduct Committee were references to the committee or other authority of the accredited body that has the function of investigating complaints against members and former members of the accredited body; and
(b)
a disciplinary body were references to a disciplinary body of the accredited body; and
(c)
the Institute were references to the accredited body.
Subpart 6—Quality review
65 FMA must ensure that regular quality reviews are carried out
(1)
The FMA must, for the purpose referred to in subsection (2), ensure that a review is carried out of the systems, policies, and procedures of—
(a)
each registered audit firm, and every other audit firm that has at least 1 partner, director, or employee who holds a licence issued under section 11; and
(b)
each licensed auditor who holds a licence issued under section 11 that is not a partner, director, or employee of an audit firm.
(2)
The quality review is for the purpose of ensuring that the systems, policies, and procedures are satisfactory in terms of—
(a)
promoting compliance with—
(i)
the requirements imposed by or under this Act and other enactments that relate to the conduct of FMC audits; and
(ii)
auditing and assurance standards; and
(b)
otherwise promoting reasonable care, diligence, and skill in the carrying out of FMC audits.
(3)
A quality review must be carried out at least once in every 4-year period during which,—
(a)
in the case of subsection (1)(a), at least 1 partner, director, or employee of the audit firm holds a licence issued under section 11:
(b)
in the case of subsection (1)(b), the person holds a licence issued under section 11.
(4)
The audit firm or licensed auditor (as the case may be) must pay to the FMA the prescribed fees and charges in respect of a quality review at the prescribed time or times.
Section 65(2)(a)(i): amended, on 1 April 2014, by section 128(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 65(2)(b): amended, on 1 April 2014, by section 128(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
66 FMA may make arrangements for quality review to be carried out on its behalf
(1)
The FMA may arrange for an accredited body or any other suitably qualified person to carry out a quality review (in whole or in part) on its behalf.
(2)
For the purposes of subsection (1), sections 73 to 76 of the Crown Entities Act 2004 (which relate to delegations) apply as if the persons to whom the FMA may make a delegation under section 73(1) of that Act include a person referred to in subsection (1).
(3)
The FMA must take reasonable steps to ensure that the judgement of the individuals that carry out a quality review is not impaired by reason of any relationship with or interest in the relevant audit firm or licensed auditor.
67 Restrictions on application of section 65
(1)
Section 65 does not apply to—
(a)
an overseas auditor who is issued with a licence by the FMA (and holds no other licence issued by an accredited body); or
(b)
an overseas audit firm that is a registered audit firm (as a result of an application made under section 26); or
(c)
the Auditor-General or any of his or her employees.
(2)
If a licensed auditor or registered audit firm is acting under the Public Audit Act 2001, the quality review under section 65 may not extend to a review of any matter relating to the carrying out of an audit under section 15 of that Act, or to the provision of a specific service under section 17 of that Act, unless the Auditor-General gives his or her written approval.
(3)
Subsection (2) does not limit subsection (1).
(4)
This section does not limit section 15A of the Public Audit Act 2001.
68 Miscellaneous matters relating to quality review
(1)
A quality review must include—
(a)
an assessment of the design of the internal quality control system of the audit firm or licensed auditor in connection with the provision of audit services; and
(b)
reasonable compliance testing of procedures, and a review of audit files in respect of a reasonable number of FMC audits, in order to verify the effectiveness of the internal quality control system; and
(c)
[Repealed](1A)
A quality review may include a review of the systems, policies, and procedures of the audit firm or licensed auditor in respect of any 1 or more of the following:
(a)
compliance with this Act and other enactments that relate to the conduct of FMC audits:
(b)
compliance with auditing and assurance standards:
(c)
the quantity and quality of resources used:
(d)
compliance with competence programmes:
(e)
any other matter that is consistent with the purpose of a quality review (see section 65(2)).
(2)
A quality review must otherwise be carried out in the prescribed manner.
(3)
If an audit file has been reviewed under subsection (1)(b), the quality review may include any further inquiries in respect of the FMC audit for the purpose of determining whether the FMC audit has been carried out—
(a)
in accordance with—
(i)
the requirements imposed by or under this Act and other enactments that relate to the conduct of FMC audits; and
(ii)
auditing and assurance standards; and
(b)
otherwise with reasonable care, diligence, and skill.
Section 68 heading: replaced, on 30 March 2025, by section 16(1) of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
Section 68(1)(b): amended, on 1 April 2014, by section 128(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 68(1)(c): repealed, on 30 March 2025, by section 16(2) of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
Section 68(1A): inserted, on 30 March 2025, by section 16(3) of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
Section 68(3): amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 68(3)(a)(i): amended, on 1 April 2014, by section 128(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
69 Offence to hinder, obstruct, or delay FMA
(1)
This section applies, in respect of a quality review of the systems, policies, and procedures of an audit firm, to—
(a)
every partner, director, and employee of the audit firm; and
(b)
every person who provides services to the audit firm under a contract for services; and
(c)
every FMC reporting entity in relation to which the audit firm (or any of its partners, directors, or employees) has carried out, or is carrying out, an FMC audit.
(2)
This section applies, in respect of a quality review of the systems, policies, and procedures of a licensed auditor, to—
(a)
the licensed auditor; and
(b)
every employee of the licensed auditor; and
(c)
every person who provides services to the licensed auditor under a contract for services; and
(d)
every FMC reporting entity in relation to which the licensed auditor (or any of his or her employees) has carried out, or is carrying out, an FMC audit.
(3)
Every person to whom this section applies commits an offence if the person hinders, obstructs, or delays the FMA (or a person referred to in section 66(1)) in connection with the carrying out of a quality review and is liable on conviction,—
(a)
in the case of an individual, to a fine not exceeding $40,000:
(b)
in the case of a body corporate, to a fine not exceeding $100,000.
Section 69(1)(c): amended, on 1 April 2014, by section 126 of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 69(1)(c): amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 69(2)(d): amended, on 1 April 2014, by section 126 of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 69(2)(d): amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 69(3): amended, on 1 July 2013, by section 413 of the Criminal Procedure Act 2011 (2011 No 81).
69A FMA must prepare report on quality reviews
(1)
The FMA must, at least once every 4 years, prepare a report on the quality reviews that have been carried out under this subpart since the last report on quality reviews.
(2)
The FMA must, no later than 1 month after preparing the report, publish a notice in the Gazette that—
(a)
states that it has prepared a report; and
(b)
specifies where a copy of the report may be inspected or obtained.
(3)
The FMA must, after publishing the notice in the Gazette, publish a copy of the report on an internet site maintained by or on behalf of the FMA.
Section 69A: inserted, on 30 March 2025, by section 17 of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
69B FMA may prepare reports about particular quality reviews
(1)
The FMA may prepare a report on a quality review of the systems, policies, and procedures of a particular licensed auditor or audit firm.
(2)
The FMA may publish a copy of the report on an internet site maintained by or on behalf of the FMA.
Section 69B: inserted, on 30 March 2025, by section 17 of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
Subpart 6A—Directions and orders
Subpart 6A heading: inserted, on 30 March 2025, by section 18 of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
70 FMA may issue directions
(1)
Subsection (2) applies if the FMA is satisfied on reasonable grounds that the systems, policies, and procedures of the audit firm or the licensed auditor are not sufficient in terms of—
(a)
promoting compliance with—
(i)
the requirements imposed by or under this Act and other enactments that relate to the conduct of FMC audits; or
(ii)
auditing and assurance standards; or
(b)
otherwise promoting reasonable care, diligence, and skill in the carrying out of FMC audits.
(2)
The FMA may give directions to the audit firm or the licensed auditor that require the audit firm or the licensed auditor, within the time and in the manner specified by the FMA in the directions, to amend the systems, policies, and procedures of the audit firm or the licensed auditor to effectively address the matters that caused the FMA to give the directions.
(3)
Subsection (4) applies if, after inquiries are made under section 68(3) in respect of an FMC audit, the FMA is satisfied on reasonable grounds that the FMC audit has not been carried out—
(a)
in accordance with—
(i)
the requirements imposed by or under this Act and other enactments that relate to the conduct of FMC audits; or
(ii)
auditing and assurance standards; or
(b)
otherwise with reasonable care, diligence, and skill.
(4)
The FMA may give directions to the audit firm or the licensed auditor that require the audit firm or the licensed auditor, within the time and in the manner specified by the FMA in the directions, to take reasonable steps to mitigate or remedy the failure to carry out the FMC audit in accordance with the matters referred to in subsection (3)(a) or otherwise with reasonable care, diligence, and skill (for example, by making a public announcement relating to the auditor’s report).
(5)
However, the FMA may not require a person, under subsection (4), to pay compensation to any other person in respect of the failure.
(6)
Subsection (4) does not limit the action that the FMA may take in respect of the matter under subpart 7 (and, for that purpose, the FMA’s inquiries under section 68(3) may form part of or constitute the FMA’s investigation under that subpart).
Section 70(1): amended, on 30 March 2025, by section 19 of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
Section 70(1)(a)(i): amended, on 1 April 2014, by section 128(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 70(1)(b): amended, on 1 April 2014, by section 128(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 70(3): amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 70(3)(a)(i): amended, on 1 April 2014, by section 128(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 70(4): amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
71 Consequences of failing to comply with directions
(1)
If an audit firm fails to comply with a direction given to it under section 70,—
(a)
every partner or director of the firm commits an offence and is liable on conviction to a fine not exceeding $25,000 if—
(i)
the failure to comply took place with his or her authority, permission, or consent; or
(ii)
he or she could reasonably have known that the failure to comply was to take or was taking place and failed to take all reasonable steps to prevent or stop it; and
(b)
the FMA may make an order that the licence of 1 or more of those partners or directors be—
(i)
suspended for the period that the FMA thinks fit; or
(ii)
cancelled; and
(c)
a notice may be given to the Registrar under section 29 to cancel or suspend the registration of the audit firm.
(2)
If a licensed auditor fails to comply with a direction given to him or her under section 70,—
(a)
he or she commits an offence and is liable on conviction to a fine not exceeding $25,000; and
(b)
the FMA may make an order that his or her licence be—
(i)
suspended for the period that the FMA thinks fit; or
(ii)
cancelled.
(3)
If the FMA orders the cancellation of a licence, it may also make an order that the person whose licence is cancelled may not apply to be relicensed, whether with the same or a different accredited body, before the expiry of a specified period.
Section 71(1)(a): amended, on 1 July 2013, by section 413 of the Criminal Procedure Act 2011 (2011 No 81).
Section 71(1)(c): amended, on 1 July 2015, by section 17 of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 71(2)(a): amended, on 1 July 2013, by section 413 of the Criminal Procedure Act 2011 (2011 No 81).
72 Miscellaneous matters relating to directions and orders
(1)
A direction given under section 70 and an order made under section 71 must—
(a)
be in writing; and
(b)
state the grounds on which it is given or made.
(2)
The FMA must give a copy of the order made under section 71 to—
(a)
the licensed auditor; and
(b)
the accredited body that issued the licence to the licensed auditor; and
(c)
the Registrar.
(3)
The FMA must not give a direction to an audit firm under section 70 unless—
(a)
the FMA gives to the audit firm (or to at least 1 of the partners or directors of the audit firm) at least 10 working days’ written notice of the following matters before it gives the direction:
(i)
that the FMA may give a direction under section 70; and
(ii)
the reasons why it is considering exercising that power; and
(b)
the FMA gives the audit firm or a representative of the audit firm an opportunity to make written submissions and to be heard on the matter within that notice period.
(4)
The FMA must not give a direction to a licensed auditor under section 70 or make an order under section 71 in respect of a licensed auditor unless—
(a)
the FMA gives the licensed auditor at least 10 working days’ written notice of the following matters before it exercises the power:
(i)
that the FMA may give a direction under section 70 or make an order under section 71 (as the case may be); and
(ii)
the reasons why it is considering exercising that power; and
(b)
the FMA gives the licensed auditor or his or her representative an opportunity to make written submissions and to be heard on the matter within that notice period.
(5)
The FMA may order that an order under section 71 is to take effect immediately or at some later time.
73 FMA must prepare annual report
[Repealed]Section 73: repealed, on 30 March 2025, by section 20 of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
74 FMA may prepare reports about particular quality reviews
[Repealed]Section 74: repealed, on 30 March 2025, by section 21 of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
Subpart 7—Investigations by FMA
75 FMA may start or take over investigation or investigate in conjunction with accredited body
(1)
The FMA may, if it is satisfied on reasonable grounds that it is in the public interest to do so,—
(a)
start an investigation; or
(b)
take over an investigation started by an accredited body; or
(c)
conduct an investigation in conjunction with an accredited body.
(2)
However, the FMA may not investigate, under this subpart, the conduct of a member of an accredited body in respect of an FMC audit unless—
(a)
the FMA is satisfied on reasonable grounds that—
(i)
the accredited body has decided not to investigate the matter; or
(ii)
the matter is not being investigated promptly or otherwise in a reasonable manner by, or on behalf of, the accredited body; or
(b)
the accredited body has asked the FMA to act under this subpart in respect of the matter.
(3)
In this subpart, an investigation is an investigation into the conduct of either or both of the following:
(a)
a licensed auditor in respect of 1 or more FMC audits (whether he or she holds a licence issued under section 11 or 12):
(b)
a registered audit firm in respect of 1 or more FMC audits (whether the firm’s registration is authorised under section 25 or 26).
(4)
This subpart does not limit any other powers of the FMA, under any other enactment, to investigate or inquire into any matter.
Section 75(2): amended, on 1 April 2014, by section 128(2) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Section 75(3): replaced, on 1 July 2015, by section 18 of the Auditor Regulation Amendment Act 2014 (2014 No 62).
76 Relationship between FMA’s investigation and other investigations or proceedings
(1)
If the FMA starts, or takes over, an investigation under this subpart in respect of a member of an accredited body, the accredited body may do the following only with the FMA’s written approval:
(a)
start or continue another investigation into the same matter:
(b)
take any disciplinary or other action against the licensed auditor in respect of the same matter.
(2)
However, the FMA may not act under this subpart in respect of the conduct of a licensed auditor if the conduct is, or has been, the subject of proceedings before a disciplinary body.
77 Accredited body must give reasonable assistance
(1)
An accredited body must, in respect of the following kinds of investigation, give all reasonable assistance to the FMA to enable the investigation to be carried out:
(a)
an investigation by the FMA involving a member of the accredited body:
(b)
an investigation by the FMA involving a registered audit firm that has 1 or more partners, directors, or employees who are members of the accredited body.
(2)
An accredited body commits an offence if the accredited body—
(a)
fails to comply with subsection (1); or
(b)
otherwise hinders, obstructs, or delays the FMA in carrying out an investigation.
(3)
An accredited body that commits an offence under subsection (2) is liable on conviction to a fine not exceeding $100,000.
Section 77(1): replaced, on 1 July 2015, by section 19 of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 77(3): amended, on 1 July 2013, by section 413 of the Criminal Procedure Act 2011 (2011 No 81).
78 Disciplinary powers of FMA
(1)
The FMA may, after acting under section 75, make 1 or more of the orders specified in subsection (2) if it is satisfied on reasonable grounds that 1 or more FMC audits carried out by the licensed auditor (A) or registered audit firm (B) (or both) are not being, or have not been, carried out—
(a)
in accordance with—
(i)
the requirements imposed by or under this Act or any other enactments that relate to the conduct of FMC audits; or
(ii)
auditing and assurance standards; or
(b)
with reasonable care, diligence, and skill.
(2)
The orders are—
(a)
an order that A’s licence be cancelled:
(b)
an order that B’s registration be cancelled:
(c)
an order that the person whose licence or registration is cancelled may not apply to be relicensed or reregistered, whether with the same or a different accredited body, before the expiry of a specified period:
(d)
an order that A’s licence be suspended for the period that the FMA thinks fit:
(e)
an order that B’s registration be suspended for the period that the FMA thinks fit:
(f)
an order prohibiting A or B (or both) from acting in respect of a specified FMC audit, or a specified class or classes of FMC audit,—
(i)
permanently; or
(ii)
for any period that the FMA thinks fit:
(g)
an order that A or B (or both) pay to the FMA any sum that the FMA considers just and reasonable towards the costs and expenses of, and incidental to, the FMA’s investigation and the proceedings.
(3)
The FMA must not exercise a power referred to in this section in relation to A or B unless—
(a)
the FMA gives A or B at least 10 working days’ written notice of the following matters before it exercises the power:
(i)
that the FMA may exercise a power under this section; and
(ii)
the reasons why it is considering exercising that power; and
(b)
the FMA gives A or B or his, her, or its representative an opportunity to make written submissions and to be heard on the matter within that notice period.
(4)
The FMA may order that an order under this section is to take effect immediately or at some later time.
Section 78(1): replaced, on 1 July 2015, by section 20 of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 78(2): replaced, on 1 July 2015, by section 20 of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 78(3): replaced, on 1 July 2015, by section 20 of the Auditor Regulation Amendment Act 2014 (2014 No 62).
79 Miscellaneous matters relating to orders
(1)
An order made under section 78 must—
(a)
be in writing; and
(b)
state the grounds on which it is made.
(2)
The FMA must give a copy of the order made under section 78 to—
(a)
the licensed auditor or audit firm against which the order is made; and
(b)
the accredited body that issued the licence to that licensed auditor or authorised the registration of that audit firm; and
(c)
the Registrar.
Section 79(2)(a): replaced, on 1 July 2015, by section 21 of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 79(2)(b): replaced, on 1 July 2015, by section 21 of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Subpart 8—FMA may take over and perform regulatory functions
80 FMA may take over and perform regulatory functions
The FMA may take over and perform a regulatory function of an accredited body (in whole or in part), or perform a regulatory function of an accredited body (in whole or in part) in conjunction with the accredited body, if—
(a)
the accredited body asks the FMA to act in that manner in relation to—
(i)
a class of its members; or
(ii)
a class of audit firms that the accredited body has authorised the registration of under section 25; and
(b)
the FMA is satisfied on reasonable grounds that it is necessary or desirable for the FMA to act in that manner in order to promote the recognition of the professional status of New Zealand auditors in overseas jurisdictions.
Section 80(a): replaced, on 1 July 2015, by section 22 of the Auditor Regulation Amendment Act 2014 (2014 No 62).
81 Powers of FMA when acting under this subpart
(1)
For the purposes of this subpart, the FMA has the following powers:
(a)
all powers that the accredited body, or any committee or disciplinary body of the accredited body, has in respect of the regulatory function or part of the regulatory function as the case may be (whether conferred by or under this Act or any other enactment or the rules of the accredited body); and
(b)
any other prescribed powers.
(2)
This section does not limit any other powers of the FMA.
Part 3 Amendments to other enactments, regulations, transitional provisions, and other miscellaneous matters
Subpart 1—Amendments to other enactments
82 Amendments to other Acts
[Repealed]Section 82: repealed, on 30 March 2025, by section 22 of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
83 Amendment to Securities Regulations 2009
(1)
This section amends the Securities Regulations 2009.
(2)
Schedule 15 is amended by revoking clause 6 and substituting the following clause:
6 Duty to audit or review half-yearly financial statements
(1)
The issuer must have the half-yearly financial statements of the borrowing group audited by a qualified auditor, unless the trustee expressly waives this requirement.
(2)
If the trustee waives the requirement for half-yearly audits, the issuer must instead have the half-yearly financial statements of the borrowing group reviewed by a qualified auditor.
Subpart 2—Regulations
84 Regulations
(1)
The Governor-General may, by Order in Council, make regulations for all or any of the following purposes:
(a)
prescribing countries, states, or territories for the purposes of the definition of overseas auditor:
(b)
prescribing changes for the purposes of sections 13 and 42:
(ca)
prescribing requirements for the purposes of section 25(1)(b)(iii) or 26(1)(ab)(iv), including (without limitation) requirements relating to a company’s or an overseas company’s—
(i)
ownership, including requirements relating to who may be a shareholder or member and who may exercise voting rights (for example, requiring all or a majority of voting rights to be held by members of the Institute or an accredited body):
(ii)
governance, including requirements relating to who may be a director or senior manager (for example, requiring all or a majority of directors to be members of the Institute or an accredited body):
(iii)
legal structure:
(iv)
systems, policies, and procedures that relate to any of the following:
(A)
promoting compliance with the requirements imposed by or under any enactment that relates to the conduct of FMC audits:
(B)
promoting compliance with auditing and assurance standards:
(C)
otherwise promoting reasonable care, diligence, and skill in the carrying out of FMC audits:
(v)
professional indemnity insurance:
(d)
prescribing conditions or matters that conditions may relate to for the purposes of section 49(2)(c):
(e)
prescribing the manner in which a quality review must be carried out (including prescribing matters that must be considered, reviewed, or tested):
(f)
prescribing powers for the purposes of subpart 8 of Part 2:
(g)
prescribing forms for the purposes of this Act, and prescribing—
(i)
the inclusion in, or attachment to, forms of specified information or documents:
(ii)
forms to be signed by specified persons:
(h)
prescribing requirements with which information or documents sent or delivered for registration must comply:
(i)
prescribing fees and charges that the Registrar or the FMA may require to be paid to him, her, or it (or the rate at which or the method by which fees and charges are to be calculated)—
(i)
in connection with the exercise or performance by the Registrar or the FMA of any function, power, or duty conferred by or under this Act (for example, when conducting a quality review):
(ii)
on an application to the Registrar or the FMA to exercise or perform any function, power, or duty conferred by or under this Act:
(j)
authorising the Registrar or the FMA to require payment of any costs incurred by the Registrar or the FMA:
(k)
prescribing procedures, requirements, and other matters, not inconsistent with this Act, for the register, including matters that relate to—
(i)
the operation of the register:
(ii)
the form of the register:
(iii)
the information to be contained in the register:
(iv)
access to the register:
(v)
the location of, and hours of access to, the register:
(vi)
search criteria for the register:
(l)
providing for any other matters contemplated by this Act, necessary for its administration, or necessary for giving it full effect.
(1A)
Any regulations made under subsection (1)(ca) relating to professional indemnity insurance may, without limitation,—
(a)
specify the terms and conditions upon which insurance is to be available, and any circumstances in which insurance cover may be excluded or modified:
(b)
specify the minimum terms and conditions that an insurance policy must satisfy:
(c)
specify circumstances in which a body corporate or any class of bodies corporate is exempt from the requirements:
(d)
require a body corporate to have arrangements in place that ensure that an accredited body can ascertain whether the insurance is being maintained in accordance with the regulations.
(2)
The Registrar or the FMA may refuse to perform a function or exercise a power until a prescribed fee, charge, or cost is paid.
(3)
Regulations made under subsection (1)(i) or (j) may—
(a)
prescribe the method of payment of a fee, charge, or cost; and
(b)
authorise the Registrar or the FMA to refund or waive, in whole or in part and on any prescribed conditions, payment of a fee, charge, or cost in relation to any person or class of persons.
(4)
Any fee, charge, cost, or other amount payable to the Registrar or the FMA by or under this Act is recoverable by the Registrar or the FMA in any court of competent jurisdiction as a debt due to the Registrar or the FMA.
(5)
Regulations under this section are secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).
(6)
If the regulations authorise the Registrar or the FMA to refund or waive payment of a fee, charge, or cost in relation to any class of persons under subsection (3)(b),—
(a)
the instrument effecting the refund or waiver is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements); and
(b)
the regulations must contain a statement to that effect.
| Legislation Act 2019 requirements for secondary legislation referred to in subsection (5) | ||||
| Publication | PCO must publish it on the legislation website and notify it in the Gazette | LA19 s 69(1)(c) | ||
| Presentation | The Minister must present it to the House of Representatives | LA19 s 114, Sch 1 cl 32(1)(a) | ||
| Disallowance | It may be disallowed by the House of Representatives | LA19 ss 115, 116 | ||
| This note is not part of the Act. | ||||
| Legislation Act 2019 requirements for secondary legislation referred to in subsection (6)(a) | ||||
| Publication | See the relevant publication, presentation, and disallowance table in the secondary legislation referred to in subsection (5) | LA19 ss 73, 74, Sch 1 cl 14 | ||
| Presentation | The Minister must present it to the House of Representatives, unless a transitional exemption applies under Schedule 1 of the Legislation Act 2019 | LA19 s 114, Sch 1 cl 32 | ||
| Disallowance | It may be disallowed by the House of Representatives | LA19 ss 115, 116 | ||
| This note is not part of the Act. | ||||
Section 84(1)(ca): inserted, on 1 July 2015, by section 23(1) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 84(1A): inserted, on 1 July 2015, by section 23(2) of the Auditor Regulation Amendment Act 2014 (2014 No 62).
Section 84(5): inserted, on 28 October 2021, by section 3 of the Secondary Legislation Act 2021 (2021 No 7).
Section 84(6): inserted, on 28 October 2021, by section 3 of the Secondary Legislation Act 2021 (2021 No 7).
Validation of fees
Heading: inserted, on 25 May 2022, by section 5 of the Companies Office Registers Funding Validation Act 2022 (2022 No 27).
84A Validation of fees used to recover costs of unrelated Companies Office registers
(1)
This section applies to a fee—
(a)
that—
(i)
is or was payable or purportedly payable on or before 30 June 2022 under any of the Acts listed in subsection (4) or any regulations made under any of those Acts; and
(ii)
was (or is or will be) used in whole or in part to recover the costs or a share of the costs of the Registrar in operating 1 or more registers or in exercising or performing any powers, functions, and duties under this Act or any regulations made under this Act; or
(b)
that—
(i)
is or was payable or purportedly payable on or before 30 June 2022 under this Act or any regulations made under this Act; and
(ii)
was (or is or will be) used in whole or in part to recover the costs or a share of the costs of 1 or more registers operated under any of the Acts listed in subsection (5) or in exercising or performing any powers, functions, and duties of a Registrar under any of those Acts or any regulations made under any of those Acts.
(2)
The fee is and always has been validly imposed.
(3)
Money received by the Registrar of any register maintained by the Companies Office in payment of the fee—
(a)
is and always has been lawfully collected and applied; and
(b)
may continue to be applied on and after 1 July 2022 to recover costs referred to in subsection (1)(a)(ii) and (b)(ii).
(4)
(5)
The Acts are—
(a)
(b)
(c)
the Companies Act 1993:
(d)
(e)
(f)
(i)
(j)
(m)
(n)
(p)
(q)
the Securities Act 1978.
(6)
In this section,—
Companies Office means the division or part of each of the following departments (formerly or currently in existence) that collected or collects fees under this Act or any of the Acts listed in subsections (4) and (5):
(a)
the former Department of Justice:
(b)
the former Ministry of Commerce:
(c)
the former Ministry of Economic Development:
(d)
the Ministry of Business, Innovation, and Employment
fee—
(a)
includes any penalty or overdue fee imposed, or interest charged, in respect of an unpaid or overdue fee; and
(b)
in relation to the Insolvency Practitioners Regulation Act 2019, includes a levy imposed under section 81 of that Act.
Section 84A: inserted, on 25 May 2022, by section 5 of the Companies Office Registers Funding Validation Act 2022 (2022 No 27).
Subpart 3—Transitional provisions
85 Certain auditors treated as holding licence
(1)
This section applies to a person who,—
(a)
immediately before the commencement of this section, is a chartered accountant who has, at any time within the 2-year period before that commencement, acted as the auditor in respect of an issuer audit; and
(b)
satisfies the transitional requirements prescribed under section 32(1)(g) for the purposes of this section.
(2)
The person must, on and after the commencement of this section, be treated as holding a licence issued by the Institute under section 11 that—
(a)
is recorded in the register; and
(b)
is subject to a condition that authorises the person to act as the auditor in respect of all kinds of FMC audits; and
(c)
expires on the earliest of—
(i)
the date that the person is issued with another licence under section 11; or
(ii)
the date that the licence is cancelled; or
(iii)
the date that is 2 years after the commencement of this section.
(3)
For the purpose of including information in the register in respect of a person that is treated as holding a licence under this section, the person must provide to the Registrar the prescribed information within 40 working days after the commencement of this section.
(4)
If a person fails to comply with subsection (3), the licence may be cancelled under section 20 or suspended under section 21.
Section 85(2)(b): amended, on 1 April 2014, by section 128(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
86 Certain overseas auditors treated as holding licence
(1)
This section applies to a person who,—
(a)
immediately before the commencement of this section, is a person referred to in section 199(1)(c) or (d) of the Companies Act 1993 and who has, at any time within the 2-year period before that commencement, acted as the auditor in respect of an issuer audit; and
(b)
satisfies the transitional requirements prescribed under section 32(1)(g) for the purposes of this section.
(2)
The person must, on and after the commencement of this section, be treated as holding a licence issued by the FMA under section 12 that—
(a)
is recorded in the register; and
(b)
is subject to a condition that authorises the person to act as the auditor in respect of all kinds of FMC audits; and
(c)
expires on the earliest of—
(i)
the date that the person is issued with another licence under section 12; or
(ii)
the date that the licence is cancelled; or
(iii)
the date that is 2 years after the commencement of this section.
(3)
For the purpose of including information in the register in respect of a person that is treated as holding a licence under this section, the person must provide to the Registrar the prescribed information within 40 working days after the commencement of this section.
(4)
If a person fails to comply with subsection (3), the licence may be cancelled under section 20 or suspended under section 21.
Section 86(2)(b): amended, on 1 April 2014, by section 128(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
87 Certain audit firms treated as registered
(1)
This section applies to an audit firm that,—
(a)
immediately after the commencement of section 85, is a partnership that has at least 1 partner who is a licensed auditor; and
(b)
has, at any time within the 2-year period before that commencement, been appointed or engaged to act as the auditor in respect of an issuer audit; and
(c)
satisfies the transitional requirements prescribed under section 32(1)(g) for the purposes of this section.
(2)
However, this section does not apply to an overseas audit firm or a limited partnership.
(3)
On and from the commencement of this section, the audit firm must be treated as being a registered audit firm and the Institute must be treated as being the relevant body for the purposes of subpart 2 of Part 2.
(4)
However, the audit firm ceases to be treated as being a registered audit firm under this section on the earliest of—
(a)
the date that the Registrar registers the audit firm under section 27 (following an application under section 25); or
(b)
the date that the registration is cancelled under section 29; or
(c)
the date that is 2 years after the commencement of this section.
(5)
Subsection (4) does not prevent an audit firm from continuing to be a registered audit firm by virtue of registration under subpart 2 of Part 2.
(6)
For the purpose of including information in the register in respect of an audit firm that is treated as being a registered audit firm under this section, the audit firm must provide to the Registrar the prescribed information within 40 working days after the commencement of this section.
(7)
If an audit firm fails to comply with subsection (6), the registration of the firm may be cancelled under section 29.
88 Transitional provisions do not prevent exercise of powers
Nothing in section 85 or 86 or 87 prevents—
(a)
the Institute or the FMA (as the case may be) from—
(i)
varying, removing, adding, or substituting conditions of the licence or registration (including varying the condition referred to in section 85(2)(b) or 86(2)(b)); or
(ii)
cancelling or suspending the licence of a person or giving a notice to the Registrar to cancel the registration of an audit firm; or
(iii)
exercising any other power in relation to that licence or registration under this Act; or
(b)
the FMA from exercising any power in relation to that licence or registration under this Act.
89 Requirements do not apply to accounting periods that have ended
(1)
The requirements in sections 8 and 9 do not apply to FMC audits in respect of financial statements, or group financial statements, prepared for accounting periods that ended before the commencement of this section.
(2)
The amendments made by section 82 and the Schedule do not apply to audits in respect of financial statements, or group financial statements, prepared for accounting periods that ended before the commencement of this section and, accordingly, the requirements and provisions that would have applied if those amendments had not been made continue to apply to those audits.
Section 89(1): amended, on 1 April 2014, by section 128(3) of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
Subpart 4—Miscellaneous provisions
90 Application of Act in respect of Auditor-General
91 FMA may act as accredited body
(1)
The FMA may act as an accredited body if it—
(a)
suspends or cancels the accreditation of a body under section 59; and
(b)
considers that it is in the public interest for it to act as an accredited body having regard to the purposes of this Act.
(2)
If the FMA decides to act under subsection (1), it must be treated as being an accredited body (except for the purposes of subpart 5 of Part 2).
92 Power to amend or revoke
(1)
The FMA’s power under this Act to make, issue, give, or publish any order, direction, notice, or other instrument includes the power to—
(a)
amend or revoke it:
(b)
revoke it and replace it with another.
(2)
This section does not limit section 48 of the Legislation Act 2019.
Section 92(2): amended, on 28 October 2021, by section 3 of the Secondary Legislation Act 2021 (2021 No 7).
93 Protection from liability for accredited bodies and others
(1)
An accredited body is not liable for anything it may do or fail to do in the course of the performance or exercise or intended performance or exercise of its functions, powers, or duties under this Act, unless it is shown that it acted in bad faith or without reasonable care.
(2)
An officer, an employee, or a person acting on behalf of an accredited body is not liable for anything he or she may do or say or fail to do or say in the course of the performance or exercise or intended performance or exercise of the accredited body’s functions, powers, or duties under this Act, unless it is shown that he or she acted in bad faith.
(3)
Despite subsections (1) and (2), this section does not affect or limit any person’s liability for an offence under this Act or any other enactment.
Section 93(3): inserted, on 30 March 2025, by section 23 of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
94 Sharing of information and documents with FMA
(1)
An accredited body may provide to the FMA any information, or a copy of any document, that the accredited body—
(a)
holds in relation to the performance or exercise of the accredited body’s functions, powers, or duties under the rules of the accredited body or under any enactment; and
(b)
considers may assist the FMA in the performance or exercise of the FMA’s functions, powers, or duties under this Act or any other enactment.
(2)
An accredited body may, subject to any conditions imposed by the FMA, use any information, or a copy of any document, provided to it by the FMA under any enactment in the accredited body’s performance or exercise of its functions, powers, or duties under the rules of the accredited body or under any enactment.
(3)
This section applies despite anything to the contrary in any enactment, contract, deed, or document.
95 Notice and service of documents
(1)
Unless this Act provides otherwise, if a provision of this Act requires or authorises any notice or other document, or any notification, to be given or provided to a person, the notice, document, or notification must be given in writing to the person—
(a)
by delivering it personally or by an agent (such as a courier) to the person; or
(b)
by sending it by prepaid post addressed to the person at the person’s usual or last known place of residence or business; or
(c)
by sending it by fax or electronic communication to the person’s fax number or electronic address provided by the person for the purpose; or
(d)
in any other manner a District Court Judge directs.
(2)
In the absence of proof to the contrary, a notice, document, or notification sent to a person in accordance with—
(a)
subsection (1)(b) must be treated as having been given or provided to the person when it would have been delivered in the ordinary course of the post; and, in proving the delivery, it is sufficient to prove that the letter was properly addressed and posted:
(b)
subsection (1)(c) must be treated as having been given or provided to the person on the second working day after the day on which it is sent.
(3)
If a person is absent from New Zealand, a notice, document, or notification given to the person’s agent in New Zealand in accordance with subsection (1) must be treated as having been given or provided to the person.
(4)
If a person has died, the notice, document, or notification may be given, in accordance with subsection (1), to his or her personal representative.
(5)
If a notice, document, or notification is required to be given to an audit firm that is a partnership, it may be given to any of the partners; and for the purposes of this Act, giving it to any of the partners must, unless otherwise directed by the FMA, be treated as service on all of those partners.
96 False declarations and representations
(1)
Every person commits an offence who, for the purpose of obtaining any licence, registration, or accreditation under this Act or for any other purpose relating to this Act, either on the person’s own behalf or on behalf of any other person,—
(a)
either orally or in writing, makes any declaration or representation to a specified body that, to the person’s knowledge, is false or misleading in any material particular; or
(b)
provides to a specified body any document knowing that the document—
(i)
contains any declaration or representation that is false or misleading in any material particular; or
(ii)
is not genuine; or
(c)
makes use of any document knowing that the document—
(i)
contains any declaration or representation that is false or misleading in any material particular; or
(ii)
is not genuine.
(2)
In subsection (1), specified body means an accredited body, the Registrar, or the FMA.
(3)
A person who is convicted of an offence under subsection (1) is liable on conviction to a fine not exceeding $50,000.
Section 96(3): amended, on 1 July 2013, by section 413 of the Criminal Procedure Act 2011 (2011 No 81).
Schedule 1 Transitional, savings, and related provisions
Schedule 1: replaced, on 30 March 2025, by section 24 of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
Part 1 Provisions relating to Regulatory Systems (Economic Development) Amendment Act 2025
Schedule 1 Part 1: inserted, on 30 March 2025, by section 24 of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
1 Interpretation
Schedule 1 clause 1: inserted, on 30 March 2025, by section 24 of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
2 First plan published under amended section 52
Despite amended section 52(1), the FMA must publish its first plan under amended section 52 within 3 years of publishing its last plan under section 52 (as in force immediately before the commencement date).
Schedule 1 clause 2: inserted, on 30 March 2025, by section 24 of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
3 First report on each accredited body published under amended section 55
The first 4-year period under amended section 55, in relation to an accredited body, is calculated—
(a)
from the date of the last report prepared by the FMA under section 55 (as in force immediately before the commencement date) that relates to the accredited body; or
(b)
if there is no previous report on the accredited body, from the date on which the body was accredited (whether before or after the commencement date).
Schedule 1 clause 3: inserted, on 30 March 2025, by section 24 of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
4 First report on quality reviews prepared under section 69A
The first 4-year period under section 69A is calculated from the date of the last report prepared by the FMA under section 73 (as in force immediately before the commencement date).
Schedule 1 clause 4: inserted, on 30 March 2025, by section 24 of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
Notes
1 General
This is a consolidation of the Auditor Regulation Act 2011 that incorporates the amendments made to the legislation so that it shows the law as at its stated date.
2 Legal status
A consolidation is taken to correctly state, as at its stated date, the law enacted or made by the legislation consolidated and by the amendments. This presumption applies unless the contrary is shown.
Section 78 of the Legislation Act 2019 provides that this consolidation, published as an electronic version, is an official version. A printed version of legislation that is produced directly from this official electronic version is also an official version.
3 Editorial and format changes
The Parliamentary Counsel Office makes editorial and format changes to consolidations using the powers under subpart 2 of Part 3 of the Legislation Act 2019. See also PCO editorial conventions for consolidations.
4 Amendments incorporated in this consolidation
Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11): Part 2, section 106(1)
Companies Office Registers Funding Validation Act 2022 (2022 No 27): section 5
Secondary Legislation Act 2021 (2021 No 7): section 3
Privacy Act 2020 (2020 No 31): section 217
District Court Act 2016 (2016 No 49): section 261
Auditor Regulation Amendment Act 2014 (2014 No 62)
Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102): sections 126, 128
Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70): section 150
Auditor Regulation Act Commencement Order 2011 (SR 2011/380)
Criminal Procedure Act 2011 (2011 No 81): section 413