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Audit tenders

The number of UK companies putting their audit out to tender is rising. In 2012 the Financial Reporting Council updated the UK Corporate Governance Code with a provision requiring FTSE 350 companies to retender their audit every ten years. Recent investigations into the audit market by the Competition and Markets Authority and the EU have also resulted in new legislation on auditor tendering and rotation. Find out more about the regulatory changes and access guides, publications and best practice in relation to audit tenders.

In this section

Articles and features

Guidance and reports

Audit quality – how to raise the bar

What steps can and should audit committees, audit regulators, investors and auditors in the UK take to improve audit quality? This essay from the Audit and Assurance Faculty examines audit quality in terms of ownership, behavioural aspects, and structural drivers.

Financial Reporting - who does what

This overview explains in simple terms who does what in the financial reporting system for UK companies with full main market listings, providing context for the current inquiry into audit, including the Brydon, Kingman, CMA and BEIS reviews.

Local Public Audit Expectation Gap

Public sector spending represents a large part of the gross domestic product of all countries and is therefore a major part of the growth and development of any economy. Local public bodies are responsible (under statute, powers delegated by central government or locally elected) for the provision of public services and for spending and receiving public money. Officials that work within these local public bodies are responsible and accountable for ensuring that public business is conducted in accordance with the law and that proper standards are maintained for the use of public money.

Evaluating your auditors

Guidance for audit committees: Guidance to assist non-executive directors on audit committees to gain an understanding of the provisions of the Combined Code on Corporate Governance


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An authoritative guide to company secretarial practice. Detailed commentary is accompanied by over 80 precedents. Chapter 11 of the handbook looks at audit, including auditor rotation and audit tenders.

Audits, accounts and financial statements

Chapter 7 gives details of the purpose of audit and the auditor's duty of care. The role of the audit committee is dealt with in detail, including audit tendering and internal control and risk management.

Changing auditors

Provides an explanation of the statutory rules on auditor appointment, the termination of the old auditor’s appointment, and professional and contractual matters.

Count down: the past present and uncertain future of the big four accounting firms (2nd edition)

This title looks at 'the questionable value and the uncertain viability of Big Audit— the business, regulatory and legal model by which audit services are delivered to the world's largest companies by the surviving global accounting networks: the Big Four - Deloitte, EY, KPMG and PwC'. It looks at the current state of 'Big Audit' and the future of these firms.

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Industry press

The Library & Information Service provides a collection of articles as a benefit of membership. Please log in to view these articles. If you are unable to access the articles, please see our Help and support page or contact library@icaew.com.

The impact of the auditor selection process and audit committee appointment power on investment recommendations

This experimental study involving 118 investment professionals looks at the impact of both the auditor selection process and the audit committee's appointment power on investment recommendations.

Audit tendering in the UK: a review of stakeholders' views

This study reports the results of a content analysis of the comment letters sent to the UK Financial Reporting Council (FRC) in response to its consultation document on the 2012 revisions of the UK Corporate Governance Code, concerning the proposal for mandatory audit tendering.

Audit tenders

The article discusses developments in the statutory audit services market, particularly in Great Britain, as of July 2016. Also cited are the changes to the Corporate Governance Code in the country, the 2014 Audit Regulation & Directive (ARD) issued by the European Union (EU), the guidance on how to best manage an audit tender, and the factors that affect the selection of audit firms like commercial confidentiality. Please contact the library to be supplied with a copy of this article.

All they survey

The article examines the impact of the changes to auditor-client relationships on audit fees. It outlines the auditing rules implemented by the Competition Commission of Great Britain and European Union (EU). It discusses issues on the strategy of accounting firms in bidding or tendering audit contracts, purchasing power of audit firms, corporate governance code revisions, and auditor switches by companies as a result of the regulations and as an expression of good corporate governance.

U.K. Watchdog Softens Audit Rotation Stance.

The article reports on the decision of the Great Britain's Competition Commission to mandate listed companies to put their audit contract out for tender every 10 years, instead of five years as originally proposed. The commission cites the importance of extending the period of tendering to better serve the needs of shareholders. It notes that the commission has recognised the comment from business and regulatory communities about the additional costs and disruption of five-year re-tendering.

Terms of use: You are permitted to access articles subject to the terms of use set by our suppliers and any restrictions imposed by individual publishers. Please see individual supplier pages for full terms of use.

Useful links

Statutory report on the audit tender process

Guidance on the audit tender process from the Audit Committee Institute, part of the KPMG Board leadership Centre. Includes sample documentation.

Investment Association guidelines on audit tenders

Guidance that sets out the expectations of the IA’s members - UK institutional investors - when companies tender their audits. Its coverage includes planning the tender; tender candidates; the tender process; and the tender decision.

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