FRC Updates Approach to Audit Supervision

The Financial Reporting Council (FRC) has today updated its Approach to Audit Supervision document, outlining how it supervises audit firms. The document has been updated to include the introduction of a Public Interest Entities Auditor Registration, Supervisor letters, and Single Quality Plans. The FRC has also taken on the role of shadow system leader for local audit, highlighting its commitment to ensuring high-quality audits in both the public and corporate sectors. The FRC’s approach is centred around three teams within the Supervision Division: Audit Firm Supervision, Audit Market Supervision, and Audit Quality Review. These teams are dedicated to promoting audit quality and fostering resilience among firms. “The FRC’s supervisory activity is not only in the best interest of audit firms but also in the public interest, and we believe that fair, proportionate and assertive engagement with firms is critical to protecting that interest,” said Sarah Rapson, Deputy Chief Executive and Executive Director of Supervision at the FRC. “The key to our approach is balance, and as an improvement regulator we employ the ‘four faces’ approach to regulation. As a System partner and Facilitator, we are focused on improving standards and practices. As a Supervisor and Enforcer, we ensure that these standards are being effectively applied and hold accountable those who fail to meet them when it is in the public interest.” 

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