Final Piece of the Jigsaw
BIS has issued its consultation paper on matters related to the implementation of the 2014 EU Audit legislation in the UK.
This completes the quarter of separate but parallel consultations which have recently been issued by the FCA, PRA and FRC on other matters related to this implementation.
Download BIS consultation paper
- The UK Government does not intend to include additional entities in the definition of a Public Interest Entity (PIE). This means that PIEs will only be those entities with securities admitted to trading on a regulated market, banks, building societies, and insurers. Companies traded on AIM will not be PIEs.
- All PIEs will be required to put their audit out to tender at least every 10 years and change their auditor at least every 20 years. BIS also sets out transitional arrangements for PIEs who first appointed their current auditor in the 13 years up to the application date for the Regulation.
- BIS sets out the underpinning legislation needed for the Financial Reporting Council (FRC) to introduce changes in technical and ethical standards for auditors as part of the implementation of the new Directive and Regulation.
- The earlier BIS Discussion Document proposed the FRC should be the competent authority under the new framework. Following consideration of the responses the Government announced in July that the FRC would be designated as the competent authority, and set out how the FRC would delegate tasks to the Recognised Supervisory Bodies (RSBs). This will mean the FRC will only have to conduct audit inspections, investigations and disciplinary cases in relation to PIEs, and oversee the work of the RSBs for other audits. However it would still be open to an RSB to agree the FRC would undertake work that would otherwise have been delegated. As now, the FRC would also have the ability to take over any particular inspection or investigation, if it deemed it to be in the public interest.