FRC plans to increase competition and resilience in the audit market
The new policy paper provides an overview of the UK Financial Reporting Council’s (FRC) work on competition in the audit market to support an ongoing dialogue with stakeholders. It focuses on:
- FRC’s approach to competition
- recent relevant developments in the UK’s audit market
- FRC’s current competition policy work, for example, on promoting effective competition, developing a standard for audit committees, market opening measures, audit market resilience
FRC states it wants competition that drives higher audit quality and market resilience.
Stakeholders can provide feedback on this paper to inform FRC’s ongoing work by 28 February 2023.
Read also about the FRC’s plan to introduce new support measures for smaller audit firms as their market share grows.
FRC consults on Standard for Audit Committees
The FRC has issued a consultation on an Audit Committee Standard. This follows the Government’s White Paper Restoring Trust in Audit and Corporate Governance.
The Standard will apply to FTSE 350 companies. The draft Standard focuses on the audit committees’ responsibilities, including auditor tendering. In this context, it refers to the public interest in audit market diversity and the market as a whole having sufficient resilience, capacity and choice.
The deadline for comments on the draft Standard is 8 February 2023.
Read more here and listen to this podcast for more details
PCAOB consultation on quality control systems
The US Public Company Accounting Oversight Board (PCAOB) proposed a new standard that would entirely replace the current quality control standards. The new standard follows a risk-based approach where a firm’s quality control system is grounded in proactively identifying and managing risks to quality.
The deadline for comments is 1 February 2023, and Accountancy Europe will submit high-level comments on the proposals.