Audit Reform has taken a step closer to reality with the final Ethical Standard and amended law due to be published by The Department for Business, Innovation and Skills (BIS) and the Financial Reporting Council (FRC) in late spring. With the implementation date fast approaching, we now have more clarity around audit tendering, mandatory firm rotation, the prohibition of many non-audit services and the non-audit services cap.
The role of the audit committee, however, has received little attention amid the important deliberations around the merits of audit firm rotation and the impact of non-audit services on auditor independence and objectivity. Nevertheless, the audit committee has a key role to play if the audit reforms are to be a success; and the new regulations include some new requirements that are difficult to navigate and in some cases will significantly impact the way audit committees of Public Interest Entities (PIE) operate in practice.
Our briefing looks at the impact of the new regulations across the following areas: