UK’s FRC Launches Consultation on Audit Quality

The Financial Reporting Council has launched a consultation on whether to publish quality indicators for the largest UK audit firms. The council is set to be replaced as regulator of the country’s auditors, accountants and actuaries under UK government plans announced last month that aim to tackle the dominance of the ‘Big Four’ audit firms – KPMG, Deloitte, PwC and EY. Indicators would enable comparisons between the firms when companies appoint external auditors and drive improvements by the audit firms themselves, the FRC said. They would cover aspects including perceived culture within the audit firm, audit quality inspection results, staff workloads, and the level of partners’ involvement in individual audits. Stakeholders have been clear there is a need for concise and comparable audit quality indicators to improve transparency and drive audit quality improvements,” said FRC Executive Director of Supervision Sarah Rapson. In May, the government announced that it would create a new accountancy regulator the Audit, Reporting and Governance Authority to replace the FRC as it strengthens its oversight of the sector in a bid to prevent sudden large-scale corporate collapses like Carillion and BHS. 

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