UK: internal audit services/extended assurance services - FRC advises caution

The Auditing Practices Board - part of the Financial Reporting Council - last month published a consultation paper concerning audit firms' provision of non-audit services to the listed companies they audit. Against this background, the FRC today announced that it had written to larger audit firms explaining the work it is doing with regard to audit firms' provision of internal audit services and extended assurance services in connection with the audit. Whilst the letter has not been published, in the relevant press release the FRC's chief executive, Paul Boyle, is quoted:

The FRC believes it is important that audit firms and their clients should be aware of the steps being taken and may want to be cautious before entering into arrangements which stretch the internal/external audit boundary, not least because it could prove to be inconvenient and/or costly to change such arrangements should the outcome of the FRC’s work be that the Ethical Standards are changed in a way that affects the provision of such services".