EY welcomes ‘10 plus 10 regime’ as BIS publishes EU ADR consultation

EY welcomes ‘10 plus 10 regime' as BIS publishes EU ADR consultation

The ‘10 plus 10 regime' will empower UK companies to retain incumbent auditor for 20 years, provided they tender by the 10th year

THE LATEST consultation from the Department for Business Innovation and Skills (BIS) on the technical legislative implementation of the EU Audit Directive and Regulation, has been published.

At its heart is a compulsion for Public Interest Entities (PIEs) to put their audits up for grabs every decade and swap auditors every 20 years, in addition to limiting the level of non-audit fees.

Hywel Ball, EY’s UK head of audit, said the ‘10 plus 10 regime’ will empower UK companies to retain their incumbent auditor for 20 years, as long as they tender by the 10th year.

Ball said: “The government is mindful of the need to consider whether the regulatory burden can be reduced, for example it is looking to provide more flexibility than the EU legislation might appear to give by allowing companies to tender at the time of their choosing, provided that they leave it no longer than 10 years between tenders.

“They have also given comfort to a small number of companies who haven’t had their auditors for very long but who, for various reasons, have tendered the audit in the last couple of years. Until the government provided this clarity, these companies faced a rather curious prospect of having to tender their audit once again in close succession. By helping to iron out the effects of this regulatory quirk, it has avoided what would have otherwise have been a very costly and time intensive exercise for those affected.”

The BIS consultation is one of four currently being conducted in parallel to the implementation, by different regulatory authorities. Among them are the FRC’s consultation on the detailed changes required to its ethical standards, auditing standards, UK corporate governance code and guidance on audit committees.

The proposed changes to the audit landscape come at a time when auditors are set to be hit with increased levy demands from the profession’s watchdog as the government cuts all funding to the Financial Reporting Council (FRC) from 2016.

Since 2009, when the government pumped in £2.7m into the FRC’s coffers, it has progressively withdrawn its contribution and will stop providing direct contributions from next year.

Related Articles

What is the future of audit?

Audit What is the future of audit?

1m Beth McLoughlin, Managing Editor
IAASB announces proposed ISA 315 changes

Audit IAASB announces proposed ISA 315 changes

1m Emanuela Hawker, Reporter
Audit sector under immediate review by CMA

Audit Audit sector under immediate review by CMA

2m Emanuela Hawker, Reporter
Record fine for Deloitte and audit partner over Aero misconduct

Accounting Standards Record fine for Deloitte and audit partner over Aero misconduct

2y Stephanie Wix, Writer
Board must set cyber security agenda - ICAEW

Audit Board must set cyber security agenda - ICAEW

2y Stephanie Wix, Writer
Eight landmarks in the history of accountancy

Accounting Standards Eight landmarks in the history of accountancy

2y Acccountancy Age
ICAEW targets state of audit in consultation paper

Accounting Standards ICAEW targets state of audit in consultation paper

3y Fraser Simpson, Reporter
Implementation of non-financial reporting should build on existing UK regime, says ICAEW

Audit Implementation of non-financial reporting should build on existing UK regime, says ICAEW

3y Calum Fuller, Reporter