The Financial Reporting Council has today published its Fourth Progress Report on the implementation of the recommendations of the Market Participants Group (MPG) and other relevant developments.

Progress achieved in implementation of the MPG recommendations since the May 2009 update includes:

• The release by the Audit Firm Governance Working Party of a draft best practice code on the governance of audit firms; and
• The publication of a summary of responses to the European Commission’s consultation on audit firm ownership.

Other relevant developments include a new consultation on changes to Ethical Standards and the publication of proposals for alternative business structures for law firms.

Paul Boyle, Chief Executive of the FRC, said:

“The FRC remains concerned about the significant uncertainty and cost which could arise in the event that one or more of the Big Four audit firms left the market. Regardless of the actions taken by market participants, this risk is likely to remain significant in the medium to long term. It remains to be seen whether market-led actions will prove to be sufficient to reduce this risk to an acceptable level.”

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. Press enquiries should be directed to Paul George, Director of Auditing and Director, Professional Oversight Board on 020 7492 2340.