Changes include a shorter list of permitted extra services and a stronger role for an “ethics partner” inside audit firms.
Given the frequency of trouble facing auditors in recent years, there was bound to be a reaction. While the government continues to wrestle with reforming the audit market and audit regulation, the current watchdog, the Financial Reporting Council (FRC), has moved to tighten the ethical rules for auditors.
Changes include a beefed-up “third party” test designed to improve auditor independence; a new, shorter list of “permitted” extra services an auditor can provide replaces the previous list of prohibited services; and a stronger role for an “ethics partner” inside audit firms to take responsibility for behaviour and conduct.
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