The pending EU Audit Regulation and Directive (ARD) is set to come into force this June and has been a catalyst for a raft of changes to auditor governance. Stephen Griggs, managing partner for audit at Deloitte, considers the FRC's new Ethical Standard for auditors
April 2016 saw the Financial Reporting Council (FRC) release its new Ethical Standard for Auditors. This came as part of a wider package of revised standards released by the regulator, including the 2016 UK Corporate Governance Code; the revised Guidance on Audit Committees; and revised International Standards on Auditing (UK and Ireland) (ISAs).
This completes the FRC’s implementation of the EU Audit Regulation and Directive (ARD) and parts of the Competition and Markets Authority’s (CMA’s) final Order. This article will focus on the new Ethical Standard.
There will obviously be a teething period while companies get to grips with the FRC’s Ethical Standard. A lot of this is new territory, particularly for smaller listed companies and unlisted banks and insurers. The new rules will undoubtedly reduce the services public interest entities (PIEs) seek from their auditors.
