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Decisions taken by the FRC to extend the maximum duration of an audit engagement (July 2024)

DECISIONS TAKEN BY THE FRC TO EXTEND THE MAXIMUM DURATION OF AN AUDIT ENGAGEMENT

The Companies Act 2006 provides that, upon a request by a public-interest entity ('the applicant'), the maximum engagement period for an auditor may be extended with the approval of the Competent Authority (the FRC) for up to two years. In a case where a 10-year audit engagement is being extended, the Competent Authority may only grant an extension if the appointment of the auditor for the first complete financial year following the end of that period is made following a selection procedure carried out in accordance with the relevant 'selection requirements'. In any case, the Competent Authority may only approve an extension if it is satisfied that exceptional circumstances exist. In no case can an extension be granted which would result in an overall audit engagement period exceeding 22 years.

Where the FRC decides to extend the maximum duration of an audit engagement, the FRC has committed to publishing those decisions in full, except where that would risk harming the commercial interests of an applicant. In those cases, the decision will be published in abridged form.

During the quarter ending 31 July 2024, the FRC received two applications for the extension of an audit engagement.

Decisions Taken

  1. The FRC approved a one-year extension to BDO LLP's appointment to audit Mobeus Income & Growth VCT plc, to facilitate a tender being run at a time when more firms are able to take part.
  2. The FRC approved two-year extensions to Deloitte LLP's appointment to audit London Power Networks plc, South Eastern Power Networks plc and Eastern Power Networks plc, to facilitate a tender being run at a time when more firms are able to take part.

Financial Reporting Council 15 August 2024

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Name Decisions taken by the FRC to extend the maximum duration of an audit engagement (July 2024)
Publication date 07 August 2024
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