11 June 2013
Financial Reporting Council press release 6 June 2013. For more on the Sharman recommendations on going concern, see here.
From the FRC press release:
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Posted in Companies Act 2006 and company law, Consultations, Equity capital markets, Regulators, Reporting and accounts |
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11 June 2013
Dated 5 June 2013:
“The further proposed remedy we are considering is to give the Financial Reporting Council (FRC) a secondary duty to promote competition between firms providing audits to FTSE 350 companies.
The scope of this duty would be limited, so that FRC would not have powers concurrent with the Office of Fair Trading (OFT) to enforce the competition rules (as many regulators have). The duty would be a secondary duty – that is to say the FRC would be required to carry out its primary duties in a way which, so far as possible, promoted competition between firms providing audit services to FTSE 250 companies
A formulation of this duty would be on the lines of having a duty carry out its functions, where appropriate, in a manner which it considers will promote competition between audit firms in the provision of statutory audit services to large companies (ie companies listed on the London FTSE 100 and FTSE 250 indices).”
More on the Competition Commission’s investigation of the large-firm audit market, and auditors generally, here.
Posted in Equity capital markets, Regulators, Reporting and accounts, UK government |
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5 June 2013
On 4 June 2013 the Financial Reporting Council issued a revised ISA 700, in its words “a significant change to the UK’s corporate governance regime…with the aim of better communication to investors”. The revised ISA 700 is here and the FRC press release is here. These revisions to ISA 700 are contained in a new paragraph 19A.
The revised standard is designed to complement changes made to the UK Corporate Governance Code in October 2012, and so is effective for audits of financial statements for periods commencing on or after 1 October 2012.
From the press release:
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Posted in Corporate governance, Equity capital markets, Regulators, Reporting and accounts |
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4 March 2013
Competition Commission press release, 22 February 2013:
“Competition in the audit market is restricted by factors which inhibit companies from switching auditors and by the tendency for auditors to focus on satisfying management rather than shareholder needs. This is the Competition Commission’s (CC) provisional conclusion in its market investigation into the supply of statutory audit services to large companies in the UK.
In a summary of its provisional findings published today, the CC states that because companies find it difficult to compare alternatives with their existing auditor, prefer continuity and face significant costs in switching, they are reluctant to change auditor and so lack bargaining power. Audit firms outside the ‘Big 4’, which dominate the market, find it difficult to show that they have sufficient experience and reputation to win the audit engagements of FTSE 350 companies.
Additionally, although auditors are appointed to protect the interests of shareholders, who are therefore the primary customers, too often auditors’ focus is on meeting the needs of senior management who are key decision takers on whether to retain their services. This means that competition focuses on factors that are not aligned with shareholder demand.
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11 February 2013
From a Financial Reporting Council press release today:
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Posted in Regulators, Reporting and accounts |
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8 February 2013
On 4 February 2013 the Financial Reporting Council issued a consultation paper ( accompanying press release here) proposing (in the words of the overview to the CP) to require the auditor’s report to:
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Posted in Companies Act 2006 and company law, Consultations, Equity capital markets, Regulators, Reporting and accounts |
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4 December 2012
Posted in Regulators, Reporting and accounts |
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4 December 2012
…in connection with the spate of accounting misdemeanours involving Chinese companies listed on US capital markets, of which the Sino-Forest scandal has been the most high-profile. SEC press release here.
On the same day, Canada’s stock market regulator has accused Ernst & Young LLP of failing to conduct a proper audit of Sino-Forest.
See also: European Commission proposals for reform of the audit market: Big Four firms may have to separate their audit businesses
Posted in Equity capital markets, Regulators, Reporting and accounts, United States |
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2 October 2012
The Financial Reporting Council issued on 28 September 2012 revised auditing standards which aim “to enhance communications to audit committees and auditor reporting”. From the FRC press release:
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Posted in Companies Act 2006 and company law, Corporate governance, Regulators, Reporting and accounts |
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