FRC and ICAS commission review of auditors’ competencies
News types: Generic Announcement
Published: 20 November 2012
The project will also explore the mix of attributes, competencies, professional skills and qualities that need to be combined in an audit team in order for it to perform a high quality public interest audit in a modern and complex global business environment.
It will consider questions such as whether or not there is a need to reconsider the staffing model for the audit of complex businesses to incorporate, for example, individuals with relevant business or technical experience within the audit team, and associated training implications.
The year-long study will be running concurrently with the implementation of measures that have been taken and that are being considered by, amongst others, the FRC, the Government, the European Commission and the International Auditing and Assurance Standards Board to address the value of audit and to reform the audit market.
The study will have regard to the implications of these measures and proposals for the skills and competencies of the auditor that will in future be necessary to deliver high quality statutory audits and to help restore confidence in audited financial statements, in particular those of banks, insurers and large listed companies.
Richard Fleck, Chairman of the FRC Conduct Committee, who will chair the project’s Steering Committee, commented:
“As corporate reporting changes to better integrate narrative and financial reporting so too may the nature of audit; including the need for more involvement by the auditor in the narrative elements of the annual report. Against this backdrop, it is also likely that the attributes, competencies, professional skills and qualities required of auditors will need to evolve in order to keep pace with the needs and expectations of stakeholders.”
Allister Wilson, Convener of ICAS’ Research Committee, added:
“There needs to be greater understanding and clarity around the skills and competencies an auditor needs to meet public expectations, maintain their objectivity and exercise effective judgement and professional scepticism.”
The report will consider whether a fundamental reassessment of the auditor’s skills and competencies is required to create an audit team that can repair confidence and meet the challenges of a changing landscape.
Notes to Editors
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About the FRC - 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.
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About ICAS - The Institute of Chartered Accountants of Scotland (ICAS) is the oldest professional body of accountants. ICAS is an educator, regulator and influencer. We represent around 19,000 members who advise and lead businesses. Around half of our members are based in Scotland, the other half work in the rest of the UK and in 100 countries around the world. Nearly two thirds of our members work in business, whilst a third work in accountancy practices. ICAS members play leading roles in around 80% of FTSE 100 companies. ICAS is also a public interest body. Visit the ICAS website at www.icas.org.uk
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About the project - Further details of the project are available at www.icas.org.uk/callsforresearch. Funding in the region of £25,000 is available to undertake this project. The project will be funded by the FRC and the Scottish Accountancy Trust for Education and Research and supported by ICAS.