Revised FRC Ethical Standard 2019 - Impacting all listed and very large entities
Who | What | Where | When | How | Why
The revised 2019 ethical rules issued by the FRC (which is in the process of evolving into the Audit, Reporting and Governance Authority, “ARGA”) impact Audit Committees, Finance Teams, Tax Teams and all aspects of the business working with professional advisers. Directly impacting:
- Public Interest Entities (PIEs) including those categorised as a Small or Medium Sized Enterprise (SME); and
- Any Other Entity of Public Interest (OEPIs), which is defined as including the following:
- AIM entities (with a market cap over €200 million)
- Lloyds syndicates
- Very large private sector pension schemes (with more than 10,000 members and more than £1 billion of assets), and
- Very large unlisted companies - this is defined as one which has:
- more than 2,000 employees; and/or
- turnover above £200 million and a balance sheet total above £2 billion.
- All businesses listed in above must ensure their governance procedures are sufficiently robust to ensure no prohibited services are provided by the audit firm in the
- Where an audit firm is providing one of the services listed above, such as tax compliance services, an internal process and decision is required to move certain services to a new provider.
- This topic should be on the agenda of all Audit Committees at the earliest opportunity, where the auditor provides any other services to the business.
Given the winds of change in the audit sector, many large audit firms are restructuring their activities and many businesses are looking for an approach to audit firm rotation and a separate and distinct approach to global compliance and advisory services, so they are ahead of the curve in relation to the Ethical Standard. Our Ethics Partner Martin Herron, Head of Audit Andrew Moyser, and our Global Tax Solutions lead Chris Danes, are ready to field any questions you have in this area.
Download our latest information sheet for more information or please email Martin, Andrew and Chris on the details below.