FRC publishes new Audit Firm Governance Code

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13 Apr, 2022

The Financial Reporting Council (FRC) has published a new Audit Firm Governance Code for the 'Big Four' audit firms and firms that audit FTSE-350 companies and significant numbers of public interest entities (PIEs).

The new Code, which was the subject of consultation in August 2021:

  • separates the roles of the board chair and senior partner/chief executive;
  • clarifies the role played by partnership boards in holding management to account;
  • introduces criteria for board composition, reinforcing the position of independent non-executives within audit firms;
  • sets out a clearer distinction between the role of Independent Non-Executives (INEs) and Audit Non-Executives (ANEs) for the largest audit firms; and
  • more closely aligns with the UK Corporate Governance Code, emphasising the importance of long-term sustainability, culture and employee engagement. 

The press releasenew Code, and feedback statement to the consultation are available on the FRC website.

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