Extended Auditor Reporting Research

Tender description

***THIS OPPORTUNITY IS CLOSED. THIS IS A CONTRACT AWARD NOTICE*** The Financial Reporting Council (FRC) regulates auditors, accountants and actuaries and sets the UK's Corporate Governance and Stewardship Codes. We seek to promote transparency and integrity in business; our work is aimed at investors and others who rely on company accounts, audit and high-quality risk management. As the Competent Authority for audit in the UK, the FRC sets auditing and ethical standards and monitors and enforces audit quality. Auditor reports form a key element in the financial reporting ecosystem as they represent the only conduit of information about an audit for those who are external to the audit process. Extended auditor reports were introduced by the FRC for the audit of Public Interest Entities (PIEs) from 2013. Following this, the FRC published two reports in 2015 and 2016 reviewing the experience of this innovation. Requirements around auditor reporting have subsequently changed as a consequence of further revisions to ISA (UK) 700 in 2019, the introduction of ISA (UK) 701 in 2016, and subsequent further changes to both standards in 2019. These changes require auditors to include meaningful disclosures on their approach to, and observations arising from, key matters impacting the audit (known as 'Key Audit Matters'). This research project supports a broader FRC exercise assessing current practice in long-form auditor reporting in the UK. This broader exercise has two objectives: • improved understanding of current auditor reporting practice • promoting good practice in auditor reporting The intention is that the FRC exercise will result in a publication and the analytical report from this research project will be included as an annex, providing supporting evidence and analysis. Purpose and Scope: The research project has two distinct parts: Part A: Literature review This will be a review of research literature on the impact of extended auditor reporting in the UK since its introduction in 2013, as produced by researchers, academics, and other appropriate bodies. Part B: Data collection and analysis A sample of auditor reports will be analysed using both quantitative and qualitative techniques. The sample itself will be sufficient to support robust statistical comparisons between market segments, audit firms and market sectors. The sample should be drawn from: • the population of all component members of the FTSE 350 as at 31 December 2020. • UK incorporated companies listed on AIM with a market capitalisation greater than €200m on the same date. The dataset will need to be designed so that it can support comparisons between: • market segment (FTSE 100, FTSE 250, AIM) • audit firm and • market sector Note - Budget exc VAT This replaced the previous notice referenced "FRC2021-0108 Extended Auditor Reporting Research"