FRC publishes updates to its Ethical Standards for auditors
17 Jan, 2024
The Financial Reporting Council (FRC) has published updates to its Ethical Standard for auditors.
The updates, which take into account the feedback received on the August 2023 consultation, include:
- Simplifying the existing ethical standard and providing additional clarity in a limited number of areas to respond to feedback from auditors.
- Changes to reflect recent revisions made to the International Ethics Standards Board for Accountants (IESBA) Code of Ethics. This aligns the UK with international standards and helps to ensure high standards of independence and ethical behaviour are applied consistently by UK audit firms and their networks.
- Adding a new targeted restriction on fees from entities related by a single controlling party. This is in response to issues identified through the FRC's audit inspection and enforcement cases.
In making the updates the FRC has also ensured that the requirements in the revised Ethical Standard are better targeted and proportionate.
The revised Ethical Standard applies for periods commencing on or after 15 December 2024.
Alongside the revised Ethical Standard, the FRC has also released guidance for auditors on the application of the Objective, Reasonable and Informed Third Party test, which forms a key part of many requirements in the Ethical Standard.
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