FRC sets out requirement to audit firms on non-financial conduct

Released 24 July 2019

The FRC has written to the six largest audit firms setting out its expectations for reporting of non-financial conduct to the FRC.

The FRC has set out its expectation for reporting of non-financial conduct as part of its Audit Firm Monitoring and Supervision (AFMAS) responsibilities.

The framework focusses on five key pillars:

leadership and governance;

values and behaviours;

business models and financial soundness;

risk management and control; and

audit quality.

The FRC wants the top six audit firms to provide them with their policies and procedures in relation to ‘internal whistle-blowing, grievance, disciplinary matters and complaints from individuals outside the firm. This information is requested no later than 30 August 2019.

The FRC also requests that firms develop a regular process for reporting of non-financial conduct complaints. They request that firms report to them quarterly, starting from the quarter to 30 September 2019, with the report being due by 11 October 2019.

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