Ethical standards for auditors

Auditors undertaking an audit in the UK are required to comply with the requirements of the Financial Reporting Council's 2016 Ethical Standard which became effective on 17 June 2016.

Audit Technical Advisory Group

The FRC has established an Audit Technical Advisory Group (TAG) to identify those areas where separate additional guidance may be necessary.

James Barbour, ICAS Director - Technical Policy, is a member of the TAG. If ICAS members would like any matters to be drawn to the attention of the TAG please email

FRC Staff Guidance Notes

The FRC has published Staff Guidance Notes in relation to the Ethical Standard.

Transitional Provisions

Firms may complete engagements relating to periods commencing before 17 June 2016 in accordance with the FRC’s 2010 Ethical Standards for Auditors, putting in place any necessary changes in the subsequent engagement period.

Engagements to provide tax services wholly or partly on a contingent fee basis to a listed entity relevant to an engagement that is not an SME listed entity (see paragraph 5.85 of Section 5 of Part B of the FRC ES), or a significant affiliate of such an entity, entered into before 17 June 2016 may continue until currently active services are completed in accordance with the engagement terms as long as:

  • The engagement was permitted under the existing ethical standards; and
  • Safeguards established continue to be applied

A ‘currently active service’ is one where the entity has already asked the firm for advice in relation to a particular matter and the firm has commenced work in relation to that matter. It does not include advice on future matters that may, for example, be provided for in an open ended engagement/contract.

Section 290 Independence - Audit and Review Engagements

Section 290 of the Code of Ethics is therefore redundant from a UK context as this deals with independence in relation to audit engagements.

As auditors in the UK have to comply with the FRC's Ethical Standards for Auditors, there is no requirement to also have to comply with Section 290 of the Code.

On those rare occasions where a member is undertaking a review assurance engagement they will need to comply with Section 290 of the Code.

Where a member acts as an independent examiner for a charity then this will be classified as a review engagement. Due to the nature of such assignments and the benefit that these charities receive from having a chartered accountant review their accounts, on many occasions on a voluntary basis, it has been decided not to require members acting in such a role to comply with the detailed independence requirements of Section 290 of the Code.

Rather, such members shall comply with the independence requirements of the respective charity regulator and are specifically scoped out of the requirements of Section 290 of this Code.


  • ICAS Code of Ethics

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