The Professional Oversight Board, an operating body of the Financial Reporting Council (FRC), has today published guidance material for those audit firms required to publish a statutory Transparency Report in 2009.

The Director of the Oversight Board, Paul George said:

“We were pleased that seven of the largest audit firms published Transparency Reports on a voluntary basis in 2008. However, there are significant differences of approach, content and level of detail. Whilst we have no wish to press audit firms to follow a detailed template, we want the reports to be genuinely informative and meet the spirit as well as the letter of the statutory requirements. With this in mind, we think that it is helpful to provide an analysis of the 2008 reports and to put forward points that we would like the relevant firms to consider carefully in finalising their 2009 Reports.”

The note provides a simple analysis of the information firms provided in their 2008 voluntary reports; it indicates where we consider that the reports fall short of the requirements for statutory reports and draws out a number of specific points that we want firms to consider carefully in finalising their 2009 Reports. It also comments on the extent to which the firms have drawn on the Audit Quality Framework, published by the FRC in 2008 in preparing their transparency reports.

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 and Actuarial Discipline Board) and by the FRC Board. The Committee on Corporate Governance assists the Board in its work on corporate governance.
2. The Professional Oversight Board provides independent statutory oversight of the regulation of the auditing profession by the recognised supervisory and qualifying bodies and, through the Audit Inspection Unit, monitors the quality of the auditing function in relation to economically significant entities. It also exercises independent oversight of the regulation of accountants and actuaries by their respective professional bodies.
3. The statutory requirements for transparency reporting are set out in the Statutory Auditors (Transparency) Instrument 2008 (POB 01/2008). These apply to the auditors of UK companies with securities admitted to trading on a UK regulated market, in respect of any financial year of a relevant audit firm starting on or after 6 April 2008.
4. All media enquiries should be addressed to Paul George, +44 (0)20 7492 2340 or John Grewe, +44 (0)20 7492 2345.