The UK Financial Reporting Council (FRC) has published a revised version of the UK Audit Firm Governance Code.
While aiming to enhance transparency and improve engagement between firms, investors and independent non-executives, the code will serve as a benchmark of good governance practice against which audit firms can report to stakeholders, according to the FRC.
The FRC also advised in its new code that to achieve the aim of greater transparency, firms should revise their transparency reports to include content which is of greater relevance to investors, regulators and other stakeholders.
The regulatory body also stated that it will conduct regular reviews of transparency reports, highlighting the best practice and innovation in governance.
In addition to considering the extent to which firms are adopting the extra provisions, the FRC will also assess whether the formal incorporation of the code would be beneficial.
Commenting on the revised governance code Stephen Haddrill, FRC CEO, said: “The UK Audit Firm Governance Code plays an integral role in enhancing justifiable trust and confidence in the value of audit among the public, particularly investors.”
“The firms’ transparency reports need to reflect this by including content that is of greater relevance to stakeholders,” added Haddrill.