FRC's Draft Minimum Standards for Audit Committees

ACCA welcomes the opportunity to comment on the proposals issued by the FRC. The ACCA Global Forums for Audit and Assurance, and for Governance, Risk and Performance have considered the matters raised and their views are represented in the following response.

Restoring trust in audit and corporate governance means ensuring the quality and accuracy of the information that companies are reporting. Good guidance and support from an improvement-minded regulator will play a vital role in helping companies achieve and demonstrate high standards. Alongside this, we will ensure that all of the main parties who play a role in financial reporting can be, and are, held to account if they fail to fulfil their responsibilities.

We commend the FRC for their progress in developing the Standard for Audit Committees (‘the Standard’) in draft. We support the approach of the FRC in being pro-active in developing this draft guidance, in line with the Government’s requirements and in advance of the passage of legislation to provide for the creation of the Audit, Regulatory and Governance Authority (ARGA). Audit Committees (AC) are an essential element of the overall corporate reporting ecosystem. A minimum standard which builds on existing guidance but provides further clarity with regard to the AC’s role with regard to external audit is to be welcomed.

We note in our detailed comments the scope for more clarity around the extent and application of the Standard. We also highlight the opportunity for improved presentation and linkage to broader FRC guidance to Audit Committees. We have provided a suggestion on suitable presentation in the areas for specific comments section below. We believe this will allow for improved clarity and accessibility by clearly showing new and existing guidance side-by-side which should help the users of the Standard and specifically in training new AC members who can familiarise themselves more quickly.

We note the roadmap provided by the FRC outlined in their Position Paper, Restoring Trust in Audit and Corporate Governance, and in their 3-year plan the proposed next steps in supports of the Government’s reforms as they transition into the Audit, Reporting and Governance Authority (ARGA) when legislation allows. ACCA remains committed to playing its part in beneficial reform to audit and corporate governance arrangements in the UK.

For a detailed response please download the consultation response document on this page.