Nash Stuart: Auditor Regulation and External Reporting Bill — In Committee 
Nash Stuart: Auditor Regulation and External Reporting Bill — In Committee 
[Volume:672;Page:18301] 
STUART NASH (Labour) 
: 
 As my colleague Clare Curran said in the very first sentence of the very first speech on Part 1 of the Auditor Regulation and External Reporting Bill this is quite complex legislation. It is indeed. It is a hundred pages. We would think that a bill governing the licensing of auditors would not need to be a hundred pages but it does. As I look through it I understand why it is such a long piece of legislation and my colleague’s comment that it is complex legislation. 
I am going to lead into why I am a little unsure of the use of some of the language in clause 17. I am a little unsure why some of the language is used. The two words I will focus on are “may” and “must”. To me the word “may” means if one wants to do it one can and the word “must” means it absolutely has to be done. I am not too sure why in some places the word “may” has been used and in others the word “must” has been used. I will give the Committee a couple of examples. I ended my last discussion on this bill by talking about ongoing competency requirements. Clause 17 states that “An accredited body must in accordance with the requirements prescribed under section 24(1)(c)—(a) require its members to complete competency programmes.” I go to clause 24(1)(c) and I see that clause 24 starts with the title: “The FMA may prescribe licensing registration and other matters”. Clause 24(1) states that “The FMA may by notice in the  
Gazette 
—(c) prescribe requirements for ongoing competence that must be complied with by persons who are issued with a licence under section 10;”. I will not go back to clause 10 again because that is in Part 1 and we talked about that enough. It is about how one goes about getting a licence. 
I am unsure why we talk about an accredited body that must do it under clause 24(1) then when we go to clause 24 we see that the “FMA may prescribe licensing registration and other matters” but clause 24(1)(c) states: “prescribe requirements for ongoing competence that must be complied with by persons …”. Again when I read clause 24 it says to me that if the Financial Markets Authority does not want to then it does not have to; but if it wants to prescribe licensing registration and other matters then that is all very well. I think that the word “must” would have been a better word to use there. I say that because as has been mentioned and as is an ongoing theme in a lot of the speeches on this bill it is about restoring the confidence of everyday New Zealanders in our financial markets. That is one of the major roles of the Financial Markets Authority. I would have liked to see the title of clause 24 state: “The FMA must prescribe licensing registration and other matters.” Clause 24(1) states: “The FMA may by notice in the  
Gazette 
”. Again I would like to have seen the word “must” used there. In my humble opinion that would provide a little more certainty. 
I would love to know the minimum standards for licensing. I think the vast majority of New Zealanders would like to see that gazetted including standards relating to required competence qualifications and expertise that a person must meet in order to be issued with a licence by an accredited body or by the Financial Markets Authority. That is pretty important. Let us face facts—that is pretty important. Again as mentioned there were a lot of unscrupulous characters out there. There were a lot of good characters and a lot of very good professionals but there were a lot of unscrupulous characters. I think we owe it to the public to ensure that the standards relating to the required competence qualifications and experience is out there and is gazetted. 
That is not stated here but it leads me on to the register which is talked about in Subpart 3. It is the register of licensed auditors and registered audit firms. Clause 29 is about the register of licensed auditors and registered audit firms. It states: “The Registrar must establish and maintain”—that is good—“in accordance with this subpart a register of licensed auditors and registered audit firms.” Again I may be getting into semantics but I am a little bit unsure why the words “may” and “must” have been used. We see in clause 30 “Operation of and access to register” that: “(1) The register may be kept—(a) as an electronic register; or (b) in any manner that the Registrar thinks fit.”