FRC Ethical Standard
Auditors undertaking an audit in the UK, and professional accountants undertaking other public interest assurance engagements in compliance with the engagement standards issued by the Financial Reporting Council (FRC), are required to comply with the requirements of the FRC's Ethical Standard.
Revised Ethical Standard 2024
In January 2024, the FRC published its Revised Ethical Standard 2024. An article explaining the main changes from the FRC’s Revised Ethical Standard 2019 is available here.
This Ethical Standard becomes effective on 15 December 2024.
Firms may complete engagements relating to periods commencing before 15 December 2024 in accordance with existing ethical standards, putting in place any necessary changes in the subsequent engagement period.
Engagements to provide previously permitted non-audit or additional services, entered into before 15 December 2024, and for which the firm has already commenced work may continue until completed in accordance with the original engagement terms, subject to the application of appropriate safeguards.
Revised Ethical Standard 2019
In December 2019, the FRC published its Revised Ethical Standard 2019. An article explaining the main changes from the FRC’s 2016 Ethical Standard is available here.
The Revised Ethical Standard 2019 became effective on 15 March 2020.
Part 4A - ICAS Code of Ethics - Independence for Audit and Review Engagements
Part 4A – Independence for Audit and Review Engagements - of the ICAS Code of Ethics is therefore redundant from a UK context as this deals with independence in relation to audit engagements.
As auditors in the UK have to comply with the FRC's Ethical Standard, there is no requirement to also have to comply with Part 4A of the Code.
On those rare occasions where a member is undertaking a review assurance engagement (other than that which is within the scope of the FRC’s public interest assurance engagements) they will need to comply with Part 4A of the Code.
Detailed explanation is provided in Section 400 of the ICAS Code of Ethics.
Where a member acts as an independent examiner for a charity then this will be classified as a review engagement. Due to the nature of such assignments and the benefit that these charities receive from having a chartered accountant review their accounts, on many occasions on a voluntary basis, it has been decided not to require members acting in such a role to comply with the detailed independence requirements of Part 4A of the Code. Rather, such members shall comply with the independence requirements of the respective charity regulator and are specifically scoped out of the requirements of Part 4A of the Code. (Section 280 - ICAS Code of Ethics).
Audit Technical Advisory Group
Following the publication of the 2016 Ethical Standard, the FRC established an Audit Technical Advisory Group (TAG) to identify those areas where separate additional guidance may be necessary.
FRC Staff Guidance Notes
The FRC has published Staff Guidance Notes in relation to the Ethical Standard.
