FRC consults on effectiveness of auditing standards

The Financial Reporting Council (FRC) has launched a consultation to find out how effective the 2016 changes to ethical and auditing standards have been and whether further steps are now needed to improve the quality of auditing in the UK

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 changes made in 2016 were intended to strengthen auditor independence, reduce conflicts, improve quality and preserve trust in independent audit. The aims of the review of the standards are to gather feedback on whether the changes made to standards have had the desired impact. Responses to the call for feedback will supplement lessons learned from the FRC’s own audit inspection and enforcement work.

It will also 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 and marked for the attention of James Ferris. The deadline for comments is 15 February 2019.

Post Implementation Review 2016 Ethical and Auditing Standards - Call for Feedback is here

Report by Pat Sweet

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