The Financial Reporting Council (FRC) has sought assurances from both audit firms and professional bodies in the accounting industry regarding cheating on exams.
It comes as a “number” of firms around the world have reportedly been sanctioned by regulators regarding cheating in exams over the past few months.
According to the FRC, the most recent example involved cheating in external professional exams in addition to cheating on internal assessments.
The FRC said it was ‘deeply concerned about these events and the potential impact on UK audits if such an issue was identified in the UK’.
In light of this, the regulator has now written to the Tier 1 audit firms and professional bodies who are Recognised Qualifying Bodies to “seek assurances that such a situation could not materialise here in the UK”.
In a letter to the CEOs of such firms, Sarah Rapson, executive director ofSupervision at the FRC said: “The FRC is deeply concerned about these events and the potential impact on UK audit firms of similar issues in the UK.
“In recent months, as these cases started to emerge, your firm’s Supervisor has already had some conversations with your firm to understand the controls your firm has in place to mitigate such a risk. Given the importance of this issue, we have decided that we need to formalise, deepen and accelerate these discussions.”
She added: “I am asking you to formally set out the preventative and detective controls in place at your firm to ensure that such incidents do not happen in the UK and how you obtain assurance as to the controls’ effectiveness. Please provide details of controls in place in respect of both individuals in the audit practice and the wider firm.
“In your response, please provide details in respect of both internal assessments undertaken throughout an individual’s career with the firm and those invigilated by the firm on behalf of a Recognised Qualifying Body as part of obtaining the chartered accountant qualification.”