The Financial Reporting Council (FRC) is looking to reinforce its ethical framework for UK auditors by launching a consultation on revisions to its Ethical Standard. The proposed changes aim to bolster the principles of integrity, objectivity, and independence that auditors are mandated to uphold. In a continuation of its commitment to reform the audit market, as outlined in its 2022 position paper, the FRC is also seeking to gather input on the potential withdrawal of the other entities of public interest (OEPI) category introduced in 2019. This move is in direct response to the evolving statutory public interest entity (PIE) definition, proposed by the UK government. One of the key proposed amendments to the Ethical Standard is the strengthening of restrictions when an audit firm’s independence could be compromised due to an excessive dependency on fees from specific connected entities. The revisions align with the updates made to the International Ethics Standards Board for Accountants (IESBA) Code, ensuring that the UK’s Ethical Standard remains in line with global benchmarks. Mark Babington, FRC Executive Director of Regulatory Standards, said: “While many of these proposed changes reflect developments at the international level, additional enhancements have also been introduced to ensure the ethical requirements are clearly understood and abided by so that there can be no uncertainty of the standards expected.” Stakeholders and industry professionals are encouraged to participate in the consultation, which will remain open until 31 October, 2023.
The FRC has today issued a consultation on revisions to its Ethical Standard to further enhance and clarify the principles of integrity, objectivity and independence auditors must abide by. Find out more and have your say: https://t.co/srF4aTTvWB #audit pic.twitter.com/d3tHbNv5bv
— Financial Reporting Council (@FRCnews) August 8, 2023
