Friday, 26 September 2014

UK: statutory audit services market - CMA publishes final Order - mandatory tendering of the statutory audit engagement

The Competition and Markets Authority has published, following consultation, the final Order that will implement the recommendations made by the Competition Commission (one of the bodies the CMA has replaced) in respect of the market for statutory audit services. A copy of the Statutory Audit Services for Large Companies Market Investigation (Mandatory Use of Competitive Tender Processes and Audit Committee Responsibilities) Order 2014 is available here (pdf). An explanatory note is available here (pdf).

The Order comes into force on 1 January 2015 and applies in relation to financial years beginning on or after this date. The Order requires, amongst other things, FTSE 350 companies to put the statutory audit services engagement out to tender every ten years or earlier. It also sets out the audit committee's responsibilities in this regard and also in respect of other areas including, for example, the influence exerted over the appointment of the audit engagement partner.

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