The Financial Reporting Council in the UK has announced “FRC Principles for Operational Separation of Audit Practices”, which will affect the “Big Four” firms. The aims of operational separation are “to ensure that audit practices are focused above all on delivery of high-quality audits in the public interest, and do not rely on persistent cross subsidy from the rest of the firm”. The firms are requested to provide a timetable for completing operational separation by 30 June 2024. We wait to see whether the Irish Auditing and Accounting Supervisory Authority (IAASA) will require a similar structure for the Irish “Big Four” and whether the FRC or the IAASA attempts to extend the requirement to mid-tier or smaller audit firms.
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