About the FRC FRC Structure Audit Quality Review Committee

Audit Quality Review Committee

The Audit Quality Review (AQR) Committee helps ensure the consistency and fairness of the FRC’s audit monitoring work. Its functions include:

  • Providing input on the monitoring strategy and on the inspection process, including the quality category guidelines.

  • Reviewing reports from the Executive that summarise inspection findings and set out a rationale for audit quality categories.

  • Providing advice, as requested, regarding inspection findings and quality categories where a request for re-consideration has been received by the Executive.

  • Providing input to audit monitoring public reports on individual firms.

  • Performing any other functions as shall be determined by the Conduct Committee from time to time.

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Audit Quality Review Committee Terms of Reference

1  Membership

The Board shall appoint a member of the Conduct Committee to be the Chair of the AQR Committee. The Conduct Committee shall appoint up to 5 other members to the AQR Committee, including but not limited to other members of the Conduct Committee.
 
No member of the AQR Committee shall be a practising auditor or an officer of any of the accountancy professional bodies.    

2  Quorum

The quorum for AQR Committee meetings shall be 3 members.

3  Secretary

The Company Secretary or his/her nominee shall act as Secretary of the AQR Committee (the Secretary).

4  Frequency of Meetings

The AQR Committee shall meet at least 4 times a year.

5  Attendance at Meetings

Only members of the AQR Committee shall have the right to attend AQR Committee meetings. The AQR Director or his nominated representative shall ordinarily attend meetings and other individuals may be invited to attend all or part of any meeting as and when appropriate.

6  Notice of Meetings

Unless otherwise agreed, notice of each meeting confirming the venue, time and date, together with an agenda of items to be discussed and supporting papers, shall be forwarded to each member of the Committee and any other person required to attend, no later than 5 working days before the date of the meeting.

7  Minutes of Meetings

The Secretary shall minute the proceedings and resolutions of all meetings of the AQR Committee, including recording the names of those present and in attendance.  Minutes of AQR Committee meetings shall be circulated to all members of the Committee and the Conduct Committee.

8  Responsibilities

The AQR Committee shall:

  1. input annually on the audit engagement monitoring strategy and risk to audit quality to the Executive and monitor progress against annual plans prepared by the Executive;

  2. oversee the AQR inspection process to ensure that a fair process is followed and that quality categories have been determined consistently by:

    1. reviewing reports from the AQR that provide a rationale for inspection findings and quality categories and that draw comparisons with similar audits inspected;

    2. providing advice to the Executive in respect of inspection findings and quality categories where a request for re-consideration has been made and where the Executive seeks it;

    3. providing input on the inspection process and quality category guidelines;              

  3. provide input to AQR audit monitoring public reports on individual firms;

  4. take all steps delegated to the AQR Committee under the Auditor Regulatory Sanctions Procedure (“ARSP”) and the Crown Dependencies Recognised Auditor Regulatory Sanctions Procedure (“CD RARSP”) including considering whether there is an indication that a Registered Auditor/Recognised Auditor has failed to comply with the Regulatory Framework for Auditing and the criteria in paragraph 4.1 of the ARSP or CD RARSP, as applicable, may be satisfied;

  5. perform any other function as shall be determined by the Conduct Committee from time to time.

9  Reporting Responsibilities

The AQR Committee Chair shall report to the Conduct Committee on its activities and proceedings at Conduct Committee meetings no less than twice a year.

10  Other

The AQR Committee shall have access to sufficient resources and is authorised to seek information from the FRC executive in order to carry out its responsibilities.
 
Approved by the FRC Board with effect from 1 July 2018.