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FRC Guidance on Audit Committees

The FRC Group on Audit Committees, chaired by Sir Robert Smith, was tasked with developing the guidance on audit committees in the Combined Code. The group's report, commonly referred to as the Smith Guidance or the Smith Report, was published on 20 January 2003 and codified the role of audit committees. It was subsequently revised and is now known as the FRC Guidance on Audit Committees.

The guidance

A revised version of the FRC Guidance on Audit Committees was published by the Financial Reporting Council (FRC) in April 2016.

At the same time, the FRC also published a Feedback Statement and Impact Assessment Enhancing Confidence in Audit: Proposed Revisions to the Ethical Standard, Auditing Standards, UK Corporate Governance Code and Guidance on Audit Committees which summarises the main points from the responses, the decisions taken by the FRC and the reasons for those decisions.

In response to requests for guidance on how audit committees evaluate the effectiveness of the external audit process, in May 2015 the FRC issued an Audit Quality Practice Aid to assist audit committees in evaluating audit quality. In July 2013 Audit tenders: Notes on best practice was published by the FRC to assist Audit committee's looking to put their external audit out to tender - this was revised in February 2017.


The establishment of the FRC Group on Audit Committees was announced in the FRC press release 'FRC Group on Audit Committees starts work' on 12 September 2002. The terms of reference for the group were attached to the initial press release.

The original version of the guidance was entitled Audit Committees: Combined Code Guidance and was announced in the press release 'Sir Robert Smith launches report on audit committees' (PN70) on 20 January 2003.

The guidance has subsequently been revised and the latest version is available from the FRC website.

Useful links

FRC consultation on the implementation of the EU Audit Regulation and Directive
Information from the Audit Committee Institute (KPMG) on the FRC's consultation published in September 2015, summarising the points covered by the consultation. The ACI website includes a selection of specimen checklists, documents and reports.

Guidance for audit committees series 
A series of titles published by the ICAEW in May 2003 which were aimed at helping non-executive directors understand the proposals set out in the Smith Guidance. These are available as part of the ICAEW's corporate governance research reports and briefings.

ICSA guidance on terms of reference audit committee 
This guidance note, published in 2013 by ICSA: the governance institute reflects the then UK Corporate Governance Code and the FRC Guidance on Audit Committees.



The FRC opened a consultation on revisions to the Guidance on Audit Committees on 29 September 2015.  


In April 2012 the FRC launched a review of the UK Corporate Governance Code and the Guidance on Audit Committees. The full text of the consultation paper, Revisions to the UK Corporate Governance Code and Guidance on Audit Committees, and the Draft revised Guidance on Audit Committees are available to download from the FRC website. The consultation period closed on 13 July 2012.

This revised guidance was published in September 2012


A revised version of the FRC Guidance on Audit Committees was published by the FRC in December 2010.


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Corporate Governance - Higgs and Smith

Guide to the duties of modern finance directors. Chapter 6 looks at corporate governance and summarises the Higgs and Smith reports.

Financial reporting, auditing and the audit committee

An essential source of reference and route map for the position of Non-executive director. Contains case studies and checklists throughout. Chapter 8 of the handbook covers Financial reporting, auditing and the audit committee and contains Model terms of reference for audit committee and Checklist for the audit committee.

Introduction and background

Chapter 1 looks at the development of corporate governance and specifically the history of corporate governance in the UK.

Overview of corporate governance - Higgs and Smith

The key institutions, products and professions of the City of London. Chapter 25 is a overview of corporate governance and summarises the Higgs report and the Smith Report.

Review of the combined code: Higgs, Smith and Tyson

An introduction to governance for directors and executives. Chapter 5 looks at corporate governance in the UK and summarises the Higgs, Smith and Tyson reports and the review of the Combined Code.

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