In our monthly roundup of developments in audit and governance, highlights of the EU audit regulation and directive (ARD), decline in audit firms by 4.6%, BHS auditor faces scrutiny

The Treasury select committee wants the Financial Conduct Authority (FCA) to tighten up its internal controls and has warned the regulator not to increase its costs, saying it is in ‘special measures’ regarding its effectiveness

As new audit regulations take effect with the introduction of the EU Audit Regulations and Directive (ARD) into UK legislation, Emile Woolf FCA emphasises the need for renewed rigour in governance and auditor oversight

The European Commission has disbanded the European Group of Auditors’ Oversight Bodies (EGAOB) and plans to replace it with a new pan-European oversight body, the Committee of European Auditing Oversight Bodies (CEAOB), to enforce the Audit Regulation and Directive (ARD)

The Financial Reporting Council has issued a revised Audit Firm Governance Code, which it claims ‘sharpens purpose and enhances transparency’ and is the first time a stand-alone guide for auditors has been available

Separation of non-audit services under the recently introduced Audit Regulation and Directive (ARD) will open up opportunities for mid-tier firms in the listed market, say James Roberts and Jo Gilbey of BDO

The Financial Reporting Council’s (FRC’s) failure to take regulatory action sooner following the failure of HBOS has been strongly criticised by the Treasury select committee, which says its original decision not to investigate the auditing of the bank was ‘a serious mistake’, labelling its response ‘inexplicable’ and ‘unacceptable’

Birmingham-based financial mutual Wesleyan has appointed EY as external auditor for the 2017 financial year, ending a 28-year relationship with PwC

The 2015-16 accounts for the Ministry of Defence (MOD) have been qualified for the seventh year running over failures to comply with the requirement under the International Financial Reporting Standards (IFRS) for determining whether a contract contains a lease, just a week after the department was slated for its failure to ensure value for money in procurement contracts

The National Audit Office (NAO) has published a scathing report into the design and procurement of a proposed five-year £800m contract to deliver NHS services in Cambridgeshire and Peterborough, which collapsed after just eight months because it ran into financial difficulties, after £8.9m had been spent on setting it up

The Financial Reporting Council (FRC)’s inaugural State of the Nation report has highlighted the number of ongoing investigations into suspected misconduct in statutory audits

The Department for Works and Pensions (DWP) has had its latest set of accounts qualified, as it has every year since 1988-89, owing to what the National Audit Office (NAO) describes as the ‘unacceptably high’ level of fraud and error in benefit expenditure, other than state pension where the level of fraud and error is lower