Talks stall on US-UK mutual recognition of accounting qualifications
Talks stall on US-UK mutual recognition of accounting qualifications
Efforts to ease cross-border mobility for auditors between the US and UK have hit a roadblock, with longstanding negotiations over mutual recognition of qualifications now suspended.
The stalled talks, first initiated in 2018 with a pilot between the Institute of Chartered Accountants of Scotland (ICAS) and the American Institute of Certified Public Accountants (AICPA), had aimed to create a framework for US and UK accountants to work more freely across jurisdictions—particularly in audit roles at multinational firms.
That pilot was twice extended before being quietly allowed to lapse last year, and while discussions are not officially off the table, progress has ground to a halt.
“I would describe the process as suspended, not ended,” said Bruce Cartwright, chief executive of ICAS, speaking to the Financial Times.
One of the core sticking points is the challenge of aligning audit training standards across jurisdictions. While there was agreement that US audit experience could potentially count toward UK audit qualifications, talks faltered over how to assess the quality of that experience.
“We couldn’t get to an agreement on what hurdles we would need,” Cartwright said, pointing to the UK’s more prescriptive approach to audit experience and oversight.
In the UK, accountants must complete additional training and practical experience before being granted an audit qualification.
The US, by contrast, imposes fewer specific requirements. The AICPA has stated that “as a general rule, we expect the same consideration for US CPAs that we offer to licensed accountants from other countries.”
The failure to secure a broader agreement also reflects structural complexities within the UK profession.
Negotiations with the AICPA have involved only ICAS and the Institute of Chartered Accountants in England and Wales (ICAEW), excluding the Association of Chartered Certified Accountants (ACCA), which represents the second-largest group of members in the UK.
The ACCA has underscored that any final decision on mutual recognition agreements ultimately lies with the Financial Reporting Council (FRC), the UK’s audit regulator. “Any arrangement agreed by the FRC will apply to all UK bodies,” a spokesperson said.
The ICAEW declined to comment on the matter, while the FRC said it remained hopeful that “all parties would continue to work together to conclude this long-running matter.”
For the Big Four accounting firms — Deloitte, EY, KPMG and PwC — and other large practices, the deadlock has practical implications.
A senior UK-based executive from one Big Four firm told the FT that enabling free movement of accountants would be essential for managing audits of complex, dual-listed entities.
“We shouldn’t underestimate the complexity of these big financial institutions,” Cartwright added. “If there is senior audit expertise available in the US that could be brought to London and vice versa, then that would be good for everybody.”
The UK government has indicated its support for mutual recognition agreements, proposing legislative changes to the Companies Act that would allow UK professional bodies to factor in overseas audit experience.
Still, without agreement on standards and oversight mechanisms, such reforms may have limited effect.
As it stands, the ambition to create a transatlantic pathway for audit professionals remains elusive—despite wide recognition of its potential to attract talent to the City of London and support international collaboration.
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