The paper sets out the issues that will be developed to support a public consultation on the text of revised standards over the summer. It also sets out how the FRC’s work on the standards responds to certain recommendations made by Sir John Kingman in his independent review of the FRC, how proposals are being developed to support the Competition and Market Authority’s Market Study of the UK Statutory Audit Market; and how revisions made to the international Code of Ethics will be incorporated into the FRC Ethical Standard.
The position paper also draws the attention of Public Interest Entity auditors to changes that will take place to UK law in the event that the UK exits the European Union with no deal or transitional period at 11PM on 29 March 2019. An appendix to the paper shows the most important implications of this, which audit firms will need to address. The FRC will also be writing to the Heads of Audit for all UK PIE audit firms, and to the Professional Accountancy Bodies to draw attention to this – the most immediate issues will be a change to the definition of a Public Interest Entity and implications for the provision of certain non-audit services which will be prohibited on a global basis rather than just within the European Union.