Audit Code Of Practice Template for New Zealand

An Audit Code of Practice is a comprehensive regulatory document that establishes the standards, procedures, and ethical requirements that auditors and audit firms must follow when conducting audits in New Zealand. This code serves as your authoritative guide for maintaining quality, consistency, and integrity in audit practices while ensuring compliance with New Zealand's stringent regulatory framework.

When do you need this document?

You need an Audit Code of Practice when establishing or updating audit procedures for your firm or organization. This document becomes essential when you're seeking accreditation from the Financial Markets Authority (FMA), applying for audit licenses under the Auditor Regulation Act 2011, or when regulatory bodies require evidence of your quality control systems. Professional accounting bodies like CA ANZ and NZICA often mandate adherence to established codes of practice for membership maintenance. Additionally, you'll need this code when conducting audits of regulated entities under the Financial Markets Conduct Act 2013, preparing for quality assurance reviews, or responding to regulatory inquiries about your audit methodologies.

Key legal considerations

The code must address fundamental principles including independence, objectivity, professional competence, confidentiality, and professional behavior as mandated by Professional and Ethical Standards (PES). Your code should establish clear quality control procedures, including client acceptance and continuance policies, human resources management, and engagement performance standards. Risk management provisions are crucial, covering how you identify, assess, and respond to risks that could compromise audit quality. The document must outline disciplinary procedures, continuing professional development requirements, and documentation standards. Consider including provisions for peer review processes, file retention policies, and procedures for handling ethical conflicts. Your code should also address specialized audit areas such as public interest entities, financial services audits, and compliance with international auditing standards adopted in New Zealand.

Legal requirements in New Zealand

Under the Auditor Regulation Act 2011, licensed auditors must maintain quality control systems that comply with professional standards issued by the NZAuASB. The Financial Reporting Act 2013 requires adherence to specific auditing and assurance standards for different entity types, including large companies, public entities, and registered charities. Your code must align with the Companies Act 1993 provisions regarding auditor appointment, duties, and responsibilities. For audits of FMC reporting entities under the Financial Markets Conduct Act 2013, additional independence and quality requirements apply. The code must incorporate relevant Professional and Ethical Standards, including independence requirements, quality control standards, and auditing standards. Regular updates are mandatory to reflect changes in legislation, professional standards, and FMA guidance. Licensed audit firms must demonstrate that their internal policies and procedures effectively implement the requirements set out in their adopted code of practice.