Another audit reform improvement that the FRC is cracking on with. UKSA suggests that reports on audit quality and quality management should be made to the shareholders
UK audit quality needs to improve if shareholders are to have confidence in the financial statements of the companies they invest in.
Despite the government being slow in passing new laws to improve auditing, the FRC has continued its efforts to raise audit quality. The latest example concerns proposed changes to audit quality management standards in the UK (“ISQMs (UK)”) - Consultations I Year I 2020 I Financial Reporting Council.
We support these changes and recently sent the FRC our comments on the proposals.
One of our key messages was that auditors' reports on their quality management processes should be provided to shareholders.
Just before we submitted the above comments, the Government’s Department for Business, Enterprise, Innovation and Skills issued its audit reform proposals for consultation - Restoring trust in audit and corporate governance: proposals on reforms.
This consultation ends on 8 July 2021. UKSA will be responding. Any members who want to share their views with our response team should write to firstname.lastname@example.org