March 24, 2020 / 4:39 PM / 7 days ago

UK audit watchdog gives virus-hit companies breathing space

FILE PHOTO: Empty offices are seen at lunchtime in Canary Wharf, as the number of coronavirus disease (COVID-19) cases grow around the world, in London, Britain March 19, 2020. REUTERS/Dylan Martinez/File Photo

LONDON (Reuters) - Britain’s listed companies should not press ahead with a requirement to tender out their audit work in the current market, the Financial Reporting Council (FRC) said on Tuesday.

Companies are required to put out their audit work to tender at least every 10 years to try to stop accounting firms becoming too cozy with clients to challenge them about their figures.

In common with other regulators, the FRC said it wanted to provide pragmatic guidance and solutions to ensure as far as possible that markets operate effectively.

“The FRC is considering a number of measures including reminding audit firms that current rules allow extensions on auditor rotation and partner rotation by up to two years,” the watchdog said.

“The FRC will be open to such requests. We recommend that companies don’t try to run audit tenders in the present circumstances,” the FRC said.

The watchdog, the Financial Conduct Authority (FCA) and the Bank of England are preparing a package of measures to ensure that companies make appropriate disclosures during the epidemic.

For now, the FCA has told companies not to present full annual results for at least two weeks so they can better assess how the coronavirus outbreak is affecting their business.

Reporting by Huw Jones; Editing by Alison Williams and Barbara Lewis

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