Auditing standards body replies to House of Lords report on “Auditors: market concentration and their role”; advocates audit tenders every 8-10 years
The Financial Reporting Council (FRC) has published its response to the very critical report by the House of Lords Economic Affairs Committee on the UK large-firm audit market. The FRC’s response can be read here. Our post on the Committee’s report can be read here.
- echoes the Committee’s concerns about concentration in the audit market i.e. the dominance of the Big Four accountancy firms;
- welcomes the Office of Fair Trading work in this area, which we discuss in this post;
- proposes a fuller audit committee report by listed companies; and
- suggests that listed companies should put their audit work out to tender every 8-10 years and that this requirement should be on a “comply or explain”, rather than mandatory, basis.
The FRC also states that it will publish proposals for reform of its own governance structures shortly.
The Government’s response to the Committee’s report is discussed in this post.