Audit Market Resilience

As the Competent Authority for audit in the UK the FRC sets auditing and ethical standards and monitors and enforces audit quality. One of the key strategic objectives of the Supervision Division for the 2020/21 financial year is to build and deepen our supervision of the major audit firms, including governance, structure, audit quality management, culture and resilience and report views on each firm accordingly. In carrying out this objective, we aim to effectively manage the risk that the audit market is severely disrupted by the failure of a significant audit firm of their withdrawal from all or part of the market. Preserving the resilience of the UK audit market is an objective of both the Audit Firm Governance Code (2016) and the Operational Separation Principles (2020), and complements the key objective of promoting and improving audit quality over time. We have now set up a page dedicated to Audit Market Resilience. We have set out some minimum standards guidance for the Big Four audit firms in relation to the recovery planning process here (PDF).