FRC issues guidance for companies tendering audits

The Financial Reporting Council (FRC) has warned companies against allowing their finance directors to lead the process of hiring the external auditor.

As part of new guidance on how to conduct an effective tender, the FRC said that in many cases audit tenders were 'driven and led by the finance director', according to research carried out in 2009 and again in 2011.

'Whilst the input of the finance director and his/her team is of great importance, best practice is clearly that the audit committee and its chairman take the lead and have the final say on the recommendation to the board,' the FRC warned.