The Auditing Practices Board (APB) is currently undertaking a review of its Ethical Standards for Auditors (ESs). The review is designed to ensure that the ESs are consistent with changes in the law which will arise from the implementation of the Statutory Audit Directive in 2008 and reflect developments and research since they were originally issued in 2004.

The APB intends to issue an exposure draft of its proposed revisions to the ESs this autumn; an accompanying consultation paper will describe the rationale for the proposed revisions.

As part of its review the APB has undertaken two research studies and has today published a summary of this work. The studies involved:

• A survey of company directors, and
• An analysis of information relating to audit fees and fees for non-audit services published in the accounts of listed companies.

The APB research is focussed on the corporate experience; information on the reaction of auditors has been provided by the accountancy bodies and academic research has recently been undertaken that provides a valuable insight into the views of investors.

Richard Fleck, Chairman of APB commented:

“The independent setting of ethical standards for auditors represented a major step in the re-establishment of confidence in financial reporting following from the post-Enron review of auditing and accounting issues. We believe that the standards APB issued in 2004 have been effective and will not need major revision. That said it is appropriate to periodically review them in the light of developments and this research, combined with other studies undertaken recently, provides us with valuable insights into current views and practices.”

1. The Financial Reporting Council (FRC) is the UK’s independent regulator responsible for promoting confidence in corporate reporting and governance. Its functions are exercised principally by its operating bodies (the Accounting Standards Board, the Auditing Practices Board, the Board for Actuarial Standards, the Financial Reporting Review Panel, the Professional Oversight Board and the Accountancy Investigation and Discipline Board) and by the Council. The Committee on Corporate Governance, whose members are drawn from the Council assists in its work on corporate governance.
2. The APB is committed to leading the development of auditing practice in the United Kingdom and the Republic of Ireland so as to:
   • establish high standards of auditing;
     
   • meet the developing needs of users of financial information; and
     
   • ensure public confidence in the auditing process.
   
   
3. All press enquiries should be directed to: Hazel O'Sullivan on 020 7492 2413.