“We are pleased that the Competition Commission has removed the proposed requirement for mandatory auditor rotation. However we have concerns over a number of its other proposed measures and the related costs. We will need to undertake more detailed cost benefit analyses before responding.
“We have previously urged the Commission to respect the 10 year audit tendering cycle introduced to the Corporate Governance Code in 2012 and to give that timeframe the opportunity to prove itself. The Commission’s proposed five year cycle for tendering also removes ‘comply or explain’ in this respect, which is a central tenet of the UK Corporate Governance Code.
“We will consider the proposal to increase the volume of audit inspections and reporting carried out by the FRC, particularly in view of extensions to our inspection work being proposed at European level. We will also take into account the balance of costs to shareholders as well as any potential benefits and how this would impact our risk based approach.
“Our views on giving the FRC an objective to have due regard to competition were included in our response to the Commission of 19 June 2013
Notes to Editors
The FRC is responsible for promoting high quality corporate governance and reporting to foster investment. We set the UK Corporate Governance and Stewardship Codes as well as UK standards for accounting, auditing and actuarial work. We represent UK interests in international standard-setting. We also monitor and take action to promote the quality of corporate reporting and auditing. We operate independent disciplinary arrangements for accountants and actuaries; and oversee the regulatory activities of the accountancy and actuarial professional bodies.
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