FRC welcomes IAASB’s revised international standards for auditor reporting

News types: Codes and Standards Announcements

Published: 22 January 2015

PN 05/15 The Financial Reporting Council (FRC) welcomes the International Auditing and Assurance Standards Board’s (IAASB) revised standards on the form and content of auditors’ reports.  They respond to calls from users of audited financial statements for more informative and insightful reports.

The IAASB’s revised standards, published on January 16th, include a new requirement for auditors of listed entities’ financial statements to communicate "Key Audit Matters" – those matters that the auditor views as most significant, with an explanation of how they were addressed in the audit.  These changes are broadly consistent with the amendments to the FRC’s auditing standards to introduce extended auditor reporting, in 2012 and 2013, which responded to the same calls for change and have been widely welcomed.

Melanie McLaren FRC Executive Director, Codes and Standards added:

“The IAASB is to be congratulated on leading change to the international standards for auditor reporting. They represent the most significant changes to the auditor reporting model at international level for decades.  They have the potential to enhance investor engagement about the audit and to provide a catalyst for audit innovation in the interest of investors and the public.

We hope they will be embraced enthusiastically by auditors and investors internationally, as our recent changes to auditor reporting have been in the UK and Ireland. If so, they should herald in an era of greater transparency about the audit for investors in many of the world’s largest capital markets.”


Notes to editors:
  1. 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.
  2. The FRC’s Director of Audit Policy, Marek Grabowski, is a member of the IAASB. He has been actively involved in the IAASB’s auditor reporting project, providing input to the IAASB on developments in our standards and their implementation to promote international alignment.

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