FRC: Review of 2016 Audit Standards

21 Nov 2018 11:07 AM

The Financial Reporting Council (FRC) is consulting with stakeholders to determine how effective the changes to ethical and auditing standards in 2016 have been in delivering high quality audit, and whether further steps are now needed to strengthen auditor independence, reduce conflicts, improve quality and preserve trust in independent audit.

The standards were introduced to support the implementation of new UK legislation in June 2016 addressing the requirements of the EU’s Audit Regulation and Directive.

The aims of the review of the standards are to: 

• gather feedback on whether the changes made to standards have had the desired impact on auditor independence, prevention of conflicts and on audit quality. Responses to the call for feedback will supplement lessons learned from the FRC’s own audit inspection and enforcement work,
• consider whether further measures are needed to address weaknesses, and ensure that audit better meets the expectations of those who rely on it, and
• consider whether auditor reporting and communication with those charged with governance could be further strengthened to better meet the needs and expectations of users.

Mike Suffield, Executive Director for Audit at the FRC, said,

“High-profile audit failures and a fall in quality identified by our inspection work make this the right time to look afresh at the standards that we introduced in 2016. Through this review we aim to address potential weaknesses and ensure that audit better meets the expectations of those who rely on it.”

Feedback and responses to the FRC’s review questions (LINK) should be sent by email to AAT@frc.org.uk and marked for the attention of James Ferris. Feedback should be received by 5pm on Friday, 15 February 2019.

Notes to editors: 

1. The FRC’s mission is to promote transparency and integrity in business.  The FRC sets the UK Corporate Governance and Stewardship Codes and UK standards for accounting and actuarial work; monitors and takes action to promote the quality of corporate reporting; and operates independent enforcement arrangements for accountants and actuaries. As the competent authority for audit in the UK the FRC sets auditing and ethical standards and monitors and enforces audit quality.
2. All Press enquiries should be directed to:

• Peter Timberlake, Head of Communications, on telephone: 020 7492 2397/ 07768 502332, or email: p.timberlake@frc.org.uk.
• Rita Carolan, Communications Manager, on telephone: 020 7492 2307 or email: r.carolan@frc.org.uk.
• Alana Sinnen, Communications Manager, on telephone: 020 7492 2395 or email: a.sinnen@frc.org.uk.