The FRC made major changes to the Ethical Standard in 2016. These changes were to implement the requirements of the Audit Regulation and Directive (ARD), and to address the recommendations arising from the FRC’s own review of the existing standard.

The regulation requirements apply to the audit of public interest entities, and the directive applies to all statutory audits. Through our audit inspection work, we have since had an opportunity to see how UK audit firms have responded to those changes, and how they have put in place measures to ensure they are able to comply with the revised requirements.