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The UK Regulator Financial Reporting Council (FRC) has published rules for a new list of audit firms permitted to carry out statutory audits in public interest entities (PIEs).
Audit firms that have already audited PIEs can use transitional arrangements. They must submit an application to the FRC and, once approved, will be included on the new PIE audit list. A transition period from September 5 to December 4 applies to submitting the application.
That regulation for the new PIE register following the UK government’s response to policy plan Restoring confidence in auditing and corporate governance. Plans to restore confidence in the UK’s supervisory and control system are presented in 2021, in response to a series of incidents surrounding the accounting profession in the UK.
Concrete action
Setting up the PIE audit register was one of the first concrete actions under the policy plan. Previous studies have shown that FRC does not have sufficient power to address structural issues in audit firms.
In mid-July, FRC itself released another paper position came out, where proposals for better corporate governance were made. The UK’s reform plans also include the creation of a new regulator, the Audit, Reporting and Governance Authority (ARGA), to replace the FRC.
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