The Financial Reporting Council (FRC) had launched a consultation on draft proposals which it has issued on a minimum standard for audit committees. The consultation is open until Wednesday 8 February 2023.
The bar is part of the preparatory work for creating the Audit, Reporting and Governance Authority (ARGA).
The FRC has no specific power under UK law to set standards for Audit Committees. The consultation focuses on the content of the norm rather than whether it should exist. Most of the draft standard's content exists in other FRC publications, including the UK Corporate Governance Code. The measure will apply to all UK-incorporated companies with a Premium Listing on the London Stock Exchange and which are included within the FTSE 350 index. The standard focuses on the following:
- The appointment of the auditor and the tendering process associated with that appointment;
- The ongoing oversight of the audit and the auditor;
- Reporting on the Audit Committee's work in respect of the audit and on compliance with the standard.
Following the consultation, the plan is for the standard to be available to audit committees voluntarily by the end of 2023, ahead of the planned legislation that will make the standard mandatory.