Regulation of auditors

In this lesson

1. 0:00 External audits overview
2. 0:40 Regulatory environment and corporate failures
3. 2:01 Harmonising standards and quality control
4. 2:44 Objective of external audit
5. 3:35 National and international regulation
6. 4:35 Professional body requirements and oversight

About this lesson

You'll discover how recent corporate collapses like Enron, Carillion, and Wirecard prompted regulators and professional bodies to strengthen quality controls, harmonise procedures, and enforce ethical standards. This content is essential for your AA paper, where understanding the regulatory framework underpins your knowledge of audit quality and professional responsibility. The lesson covers regulation at three levels: national legislation (such as UK Companies Act requirements), international standards (set by the International Auditing and Assurance Standards Board), and professional oversight from bodies like ACCA and ICAEW. You'll learn that statutory audits—those required by law—must meet specific conditions and standards, and that external auditors must be members of an appropriate professional body to conduct them. Professional bodies play a crucial role beyond initial qualification, providing ongoing continuing professional development, implementing ethical requirements, monitoring compliance, and taking action against practitioners who fail to meet standards. Understanding these layers of regulation helps you grasp how the profession maintains integrity and public trust.

Duration: 6m