Tuesday, 15 October 2013

UK: Competition Commission statutory audit services market inquiry - summary of final report published

The Competition Commission has today published a summary of its final report for the inquiry into the statutory audit services market: see here (pdf). The final report will be published shortly. The Commission is recommending that FTSE 350 companies must put their statutory audit engagement out to tender at least every ten years. Companies should not, in its view, be able to delay tendering beyond ten years, something that is currently possible under the 'comply or explain' framework of the UK Corporate Governance Code. Indeed, the Commission believes that many companies would benefit from going out to tender every five years.

Changes are also recommended to the UK Corporate Governance Code and UK Stewardship Code in order to promote shareholder engagement, including he introduction of an advisory vote for shareholders in respect of the audit committee report.

Update (16 October 2013) - the final report and accompanying appendices and glossary have been published: see, respectively, here (pdf) and here (pdf).

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