"Two consultations, which have just been issued by BIS and the FRC, now clarify the applicability of the new EU Audit Regulation and Directive to smaller and non-quoted financial institutions. The definition of a "Public Interest Entity" is being extended from June 2016 to include all banks and insurance companies of whatever size, where as previously only PLCs and the largest financial institutions were affected. These new PIEs will be subject to the same re-tendering rules, prohibited non-audit services (NAS), 5 year partner rotation and auditor engagement with the audit committee as the largest PLC. From around 2019, they will also be subject to the 70% cap on NAS. This extension of the rules has passed many smaller financial institutions by.

Worse still, the EU Audit Regulation is law and fully applicable in the UK, so breach of these rules is a serious offence. June 2016 is now very close and new PIEs need to understand when the new rules affect them and how. It is quite possible that some will need to organise an audit tender during 2016 so as not to break the law. Audit Review can help. We have a range of services to help firms comply regardless of size and experience".

Reviewing and tendering internal audit

The UK Governance Code imposes requirements on audit committees to review internal audit effectiveness and there is growing awareness of the requirement of the International Audit Standard to have an external review of internal audit every 5 years. Audit Review can provide that external review.

Our internal audit reviews look at issues such as

  • internal audit processes and structures

  • the relationship between internal audit and other control or quality assurance functions

  • whether internal audit is focussed on what the company needs

  • internal audits relationships and ability to communicate with stakeholders and the perceptions of those stakeholders.

In cases where the review highlights significant issues it may trigger a tender. Whether on a fully out-sourced or co-sourced basis, Audit Review can manage your audit tender process.

Audit Review uses a tried and tested tender methodology which

  • clearly defines your audit tender objectives

  • examines any likely conflicts of interest

  • collects and manages the data the tenderers will require

  • designs the RFP document

  • objectively evaluates the responses

  • manages questions and meetings with management

  • assists in making a decision.