Auditing and Assurance Standards and Guidance

Audit Regulation

means Regulation (EU) No 537/2014 of the European Parliament and of the Council dated 16 April 2014 on specific requirements regarding statutory audit of public-interest entities and repealing Commission Decision 2005/909/EC.

Adverse Finding

means a finding by Executive Counsel, an Enforcement Committee or a Tribunal that a Respondent has breached a Relevant Requirement.

Allegation

means information about a Statutory Auditor or Statutory Audit Firm which raises a question as to whether they have breached a Relevant Requirement. Executive Counsel shall particularise the Allegation(s) which are to be set out in any Notice of Referral to the Enforcement Committee or in any Notice of Hearing.

Appeal

means an appeal against the Final Decision Notice of the Tribunal.

Appellant

means a Statutory Auditor or Statutory Audit Firm seeking to appeal under these Rules.

Appeal Panel

means the panel constituted to hear Appeals in accordance the Tribunal Terms of Appointment issued by the Conduct Committee.

Appeal Tribunal

means the Appeal Tribunal appointed to consider an appeal in accordance with Rule 67 and the Tribunal Terms of Appointment issued by the Conduct Committee.

Case Examiner

means an officer of the FRC whose responsibilities include the exercise of the functions under Part 2 of these Rules. The Case Examiner shall not be a practising auditor or an individual who has, during the previous three years, carried out statutory audits; held voting rights in an audit firm; been a member of the administrative, management or supervisory body of an audit firm; been a partner, employee of, or otherwise contracted by, an audit firm.

Case Management Committee

means a committee as constituted under its terms of reference and who may undertake functions under Rules 4 or 5 where these have been delegated to it by the Conduct Committee

Case Management Directions

means Standard Directions and/or directions given by the Chair under Rule 28.

Case Management Meeting

means a meeting held by the Chair to give Case Management Directions.

Chair

means the Chair of the Tribunal appointed in accordance with the Tribunal Terms of Appointment issued by the Conduct Committee.

Conduct Committee

means the Conduct Committee as established by the FRC Board under the FRC's Articles of Association.

Constructive Engagement

means any of the range of forms of engagement set out in the Case Examiner Guidance issued by the Conduct Committee.

Days

means calendar days.

Decision Maker

means Case Examiner, Conduct Committee, Case Management Committee, Executive Counsel, the Enforcement Committee, Chair or Tribunal.

Decision Notice

means the notice issued by Executive Counsel or the Enforcement Committee with the findings and recommended sanction.

Directive

means Directive 2006/43/EC of the European Parliament and of the Council of the European Union on statutory audits of annual accounts and consolidated accounts, amending Council Directives 78/660 EEC and 83/349 EEC and repealing Council Directive 84/253/EEC (and as amended by Directive 2008/30/EC, Directive 2013/34/EU and Directive 2014/56/EU).

Enforcement Action

means any steps taken pursuant to Rules 17, 18, 24, 25, 27 and 54 of these Rules.

Enforcement Committee

means a committee as constituted under its terms of reference issued by the FRC Board. and shall exercise its functions in accordance with Part 4 and Part 6

Executive Counsel

means a legally qualified officer of the FRC appointed to that office by the FRC's Nominations Committee or the person or persons to whom the FRC Board or Executive Counsel delegates responsibility.

Final Decision Notice

means the notice issued by Executive Counsel, the Enforcement Committee or Tribunal setting out the Decision Maker's conclusive findings and Sanction.

FRC

means the Financial Reporting Council Limited, a company limited by guarantee incorporated in England and Wales and the designated competent authority pursuant to the SATCAR 2016.

Hearing

means an oral hearing before the Tribunal.

Initial Investigation Report

means the report prepared by or on behalf of Executive Counsel which outlines the Allegation and those Relevant Requirements which the Respondent appears to have breached and summarises the evidence and documents obtained in the course of the investigation.

Interim Order

means an order which imposes restrictions on the Respondent (in accordance with guidance issued by the Conduct Committee) pending the outcome of the FRC's investigation or proceedings.

Investigation Report

means the report finalised by or on behalf of Executive Counsel following any submissions from the Respondent to the Initial Investigation Report.

Notice of Cancellation

means written notification that an investigation or proceedings against a Respondent has been cancelled under Rule 74 or 76.

Notice of Hearing

means written notification in accordance with Rule 34 of a Hearing before the Tribunal under Part 5.

Notice of Investigation

means written notification that an Allegation has been referred for investigation under Rule 7

Notice of Referral to the Enforcement Committee

means written notification, in the form as required by Rule 20, that an Allegation has been referred to the Enforcement Committee.

Party/Parties

means the Respondent and Executive Counsel and may refer to those representing them.

Publication Policy

means the FRC's publication policy from time to time in force and issued by the Conduct Committee.

Public Interest Entity

has the meaning set out in Regulation 2, SATCAR 2016.

Recognised Supervisory Body

means a supervisory body, within the meaning in section 1217(1) of the Companies Act 2006, recognised in accordance with Schedule 10 of that Act (as amended) and for the purposes of Part 3 of these Rules the body to whom an investigation under this procedure has been delegated pursuant to Regulation 3(2) of the SATCAR 2016.

Relevant Requirement

has the meaning set out in Regulation 5(11) SATCAR 2016 or Regulation 11(5)(b) of SATCAR 2016.

Respondent

means a Statutory Auditor or Statutory Audit Firm against whom an Allegation has been made.

Rules

means the rules set out in this Audit Enforcement Procedure.

Sanction

means a sanction under Rule 96.

Sanction Policy

means the policy document on sanctions approved by the Conduct Committee.

SATCAR 2016

means the Statutory Auditors and Third Country Auditors Regulations 2016 (SI 2016/649).

Secretariat

means any person, with no decision making function, appointed by the FRC to exercise administrative functions and to support the Tribunal.

Standard Directions

means directions applicable to all cases referred for a Hearing save as set out in Rule 31.

Statutory Audit

means an audit of annual financial statements or consolidated financial statements required by the Companies Act 2006 (as amended).

Statutory Audit Firm

means a legal person or any other entity, regardless of its legal form, that is approved by or on behalf of the FRC to carry out Statutory Audits (and for these purposes includes such a person or any other entity that is appointed to perform third country audit functions) and is potentially liable to Enforcement Action under these Rules.

Statutory Auditor

means a natural person who is approved by or on behalf of the FRC to carry out Statutory Audits (and for these purposes includes such a person who is appointed to perform third country audit functions) and is potentially liable to Enforcement Action under these Rules.

Third country audit function

has the meaning set out in Regulation 11 (8) of SATCAR 2016.

Tribunal

means a Tribunal appointed in relation to a specific case.

Tribunal Panel

means the Tribunal Panel constituted in accordance with the Tribunal Terms of Appointment issued by the Conduct Committee to conduct Hearings and those matters set out in Parts Part 5, Part 6, Part 7 and Part 9of this Procedure.