FRC publishes a policy paper outlining its approach to competition in the audit market

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07 Dec, 2022

The Financial Reporting Council (FRC) has published a policy paper providing an overview of its approach to competition in the audit market.

The policy paper has been published in light of the publication of the government’s response to the Department for Business, Energy and Industrial Strategy (BEIS) White Paper Restoring trust in audit and corporate governance and follows the FRC’s July 2022 position paper which set out how it would support the Government’s reforms as it transitions into the Audit, Reporting and Governance Authority (ARGA).  In that paper the FRC indicated that it would develop and consult on a policy paper setting out its approach in respect of the Government’s proposed market resilience/competition objective for the ARGA and the work which will be undertaken to prepare ahead of legislation.

The policy paper sets out the need for a market that consistently delivers high quality and is resilient.  It focuses on promoting competition to drive audit quality and improve resilience within the whole audit market and not just the FTSE 350.  It covers:

  • The FRC’s approach to competition in the audit market;
  • Recent developments with competition in the audit market; and
  • The FRC’s current work on competition in the audit market.

Comments on the policy paper are welcomed by 28 February 2023.

A press release and the full policy paper are available on the FRC website.

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