The Financial Reporting Council (FRC) has today published a Discussion Paper 'Promoting Audit Quality'. This is the first of a number of Discussion Papers to be published by the FRC discussing the way it addresses its objectives, and inviting stakeholders and commentators to comment on the FRC’s approach.

This Discussion Paper addresses the FRC’s objective of promoting and maintaining confidence in the audit process and the resulting audit report. This is a key component of the corporate reporting and governance regime that leads to the effective operation of capital markets. The Discussion Paper seeks opinions as to whether, within the existing legal and regulatory framework, all appropriate steps are being taken to maintain and enhance the quality of audits and, if not, seeks views as to what more could or should be done.

The Discussion Paper identifies those drivers that the FRC believes are central to achieving a high quality audit of listed companies and then considers whether there are ‘threats’ which weaken the effective operation of those drivers.

The Discussion Paper has been prepared in the context of the financial reporting framework in the UK and the Republic of Ireland. However, because of the increasingly international context in which standard setting takes place, the FRC is keen to receive the views of all those interested in promoting high quality audits wherever they may be located.

Comments on the Discussion Paper are invited by 31 March 2007. Thereafter the FRC envisages holding meetings at which the suggestions that emerge can be discussed and the FRC will formally consult on any proposals that it intends to take forward. To the extent that the comments reveal a consensus for change or action that is outside the FRC’s powers, it will raise those matters with those responsible.

Richard Fleck, Chairman of the Auditing Practices Board, said:

“The FRC's purpose in undertaking this process is to ensure that it is aware of the views of the constituencies that it serves, and that its policies and actions command support. We are keen to hear the views of all those interested in promoting high quality audits.”

Copies of FRC publications, including this Discussion Paper, can be downloaded free of charge from the Publications section of the FRC’s web site (www.frc.org.uk/publications/pubs.cfm). Printed copies of the Discussion Paper can be obtained free of charge from:

FRC Publications
145 London Road
Kingston upon Thames
Surrey KT2 6SR

Telephone: 020 8247 1264
Fax: 020 8247 1124
Email: customerservices@cch.co.uk 

1. The Financial Reporting Council (FRC) is a unified, independent regulator. Its aim is to promote confidence in corporate reporting and governance.
2. The FRC’s six operating bodies are: the Accounting Standards Board, the Auditing Practices Board, the Board for Actuarial Standards, the Financial Reporting Review Panel, the Professional Oversight Board, and the Accountancy Investigation and Discipline Board. The Council is responsible for the FRC’s work on corporate governance and is assisted by a Committee on Corporate Governance, whose members are drawn from the Council.
3. All Press enquires in relation to this Discussion Paper should be directed to: Richard Fleck (Chairman, Auditing Practice Board - telephone 020 7374 8000), Paul George (Director, Professional Oversight Board - telephone 020 7492 2340) or Jon Grant (Executive Director, Auditing Practices Board - telephone 020 7492 2410).