The regulator’s decision follows the amendments to the Companies Act 2006 made on the implementation of the EU audit regulation and directive and the different requirements for recognised supervisory bodies.

In the revocation order, the FRC said it had concluded that the AAPA did not meet the requirements of parts two and three of schedule 10 of the act, which state that a body must have adequate resources for the ‘effective monitoring and enforcement of compliance with its rules’, and ‘ensure that those resources may not be influenced improperly by the persons monitored’.

Part three adds supervisory bodies must ‘have adequate arrangements for enabling the performance by its members of statutory audit functions to be monitored by means of inspections’.

The FRC held that these conditions were not satisfied by the AAPA. The remaining three recognised supervisory bodies are ACCA, ICAS and ICAEW.

AAPA members continue to hold an appropriate audit qualification and this means that, in order to continue practising as statutory auditors, they will have to be registered with another recognised supervisory body.

The AAPA was formed in 1978 as a professional body for auditors recognised individually under the Companies Act 1948. In September 1991, AAPA achieved the status of a recognised supervisory body and eligible AAPA members have since been entitled to use the designation 'registered auditor'.

AAPA is not an examining body: all of its members have been admitted either because they have individual audit authorisation or because they have obtained a qualification from another body which is recognised for audit purposes in the UK.

Since June 1996, AAPA has been a subsidiary company of the ACCA. Up until now, APPA has maintained its own separate and distinctive identity constitutionally. There were approximately 500 AAPA members when it became an ACCA subsidiary, with only 22 registered auditors through the AAPA today, 18 of which are one-partner firms and four two-to-six partner firms.

ACCA director of regulation and governance Sundeep Takwani told CCH Daily: 'AAPA has operated as a Recognised Supervisory Body (RSB) for audit purposes over the past 25 years, with ACCA managing all of the underlying regulatory arrangements and issuing audit licences to eligible AAPA members. New audit regulation legislation has, however, now been passed and the overall regulator for audit, the FRC has decided that only those bodies with the capability to run their own regulatory arrangements will continue as RSBs. AAPA does not have this capability in its own right and so will shortly cease to be an RSB.   

'ACCA and FRC have between them confirmed that existing AAPA firms authorised by ACCA for audit purposes will not be affected by this change and will remain eligible for audit licences.'

The FRC's revocation order can be read here.