In part six of the EU audit reform series, David Young, senior adviser at Independent Audit, reviews requirements for regular audit tenders under the EU Audit Regulations and Directive (ARD)
Up until the financial crisis of 2008, the tendering of audits by the UK’s quoted companies was a rare event, triggered occasionally by a merger, sometimes by perceived service failings or a falling out between a management team and auditors, and very occasionally by best practice.
In the space of six years, this has changed completely so that audit tendering has now become common place in the UK, provoked initially by the Financial Reporting Council (FRC) and changes to the UK Corporate Governance Code. This was given added impetus by the Competition & Markets Authority’s Order on the statutory audit services market in October 2014, and capped and partly superseded by the EU’s 2014 Audit Regulation & Directive (ARD) containing the mandatory auditor rotation rules which came into effect from 17 June 2016.
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