Mark Babington details how the profession and the FRC are supporting audit quality by collaborating on the Audit Technical Advisory Group.
The EU Audit Regulation and Directive (ARD) required many changes to be made to the Financial Reporting Council’s (FRC’s) Auditing and Ethical Standards in 2016. At the same time, the results of a major FRC ethics review and changes to international standards made by the IAASB also had to be reflected in the revisions. All of these changes left us with two main challenges: one was revising and qualityassuring a significant volume of material to the satisfaction of the FRC board, having taken account of stakeholder feedback provided in two public consultations; and the second was to properly implement and embed the new principles-based requirements, which we have done by working closely with practitioners and other stakeholders.
Although the purpose of the ARD was widely understood, the devil is in the interpretation of the detail and ensuring consistency of application both in the UK audit market and in the EU single market.
This is not always straightforward, as some of the language used in ARD is ambiguous. There is also flexibility at the EU level offered by a series of member state options. However, we have sought to address these matters by considering the high-level principles that we are seeking to address, rather than trying to turn the standards into a detailed rulebook.
Find out more
Members of the Audit and Assurance Faculty and subscribers to Faculties Online
To read the complete article, subscribe to Faculties Online or join the Audit and Assurance Faculty and get access to this article in full, plus all future publications, events, webinars and services.