UK: FRC says Audit Transparency Reporting is ineffective

The Financial Reporting Council has published the results of its review of audit firm transparency reporting: see here (pdf). The FRC reviewed, amongst other things, the 2017 Transparency Reports for each of the 33 audit firms that audit a public interest entity and which, therefore, are subject to the requirement to prepare a Transparency Report (see, now, EU Regulation 537/2014, article 13). The FRC identified five firms - unnamed in the report - that had failed to publish a Transparency Report notwithstanding the requirement to do so.

The FRC has concluded that audit transparency reporting is ineffective, with Transparency Reports seen by many firms as a marketing opportunity (rather than an accountability or compliance document) and the Reports themselves remaining unread by the intended beneficiaries (principally investors and audit committee members). A review of the current requirements will begin in 2020.