Greg Kilminster
Head of Product - Content
FRC releases revised Ethical Standard for auditors
The Financial Reporting Council (FRC) has released a revised version of the Ethical Standard for auditors. This update follows a consultation issued back in August 2023.
The revisions:
- Enhance prohibitions where an audit firm’s independence could be threatened by an economic over reliance on fees from specific entities that are connected.
- Reflect significant developments in the International Ethics Standards Board for Accountants (IESBA) Code since the FRC last revised the Ethical Standard in 2019.
- Simplify the existing ethical standard and provide additional clarity in a limited number of areas to respond to helpful feedback from auditors.
Alongside the revised Ethical Standard, the FRC has also released guidance for auditors on the application of the Objective, Reasonable and Informed Third Party test, which forms a key part of many requirements in the Ethical Standard. The updated standard will take effect from 15 December 2024.
Click here to read the full RegInsight on CUBE’s RegPlatform
EIOPA releases report on the application of IDD
The European Insurance and Occupational Pensions Authority (EIOPA) has released its second report on the Insurance Distribution Directive (IDD) for 2022 and 2023. The report provides an in-depth analysis of the insurance intermediaries’ market structure on a country-by-country basis and highlights changes in the application of the IDD compared to the previous reporting period.
The report identifies several significant issues, including:
- The poor quality of advice and selling methods in some markets, where customers’ demands and needs were not always taken into account and pre-contractual information was not provided.
- Challenges related to sustainability preferences, with limited data making it difficult for manufacturers to offer sustainable products, customers struggling to understand complex concepts and disclosures, and insurance distributors struggling to find appropriate training.
- Weaknesses in remuneration and conflicts of interest policies, with inducement analysis often being standardised and not examining whether customers’ interests could be harmed. Similarly, remuneration policies were mostly based on quantitative rather than qualitative criteria.
- The harm caused by cross-selling.
Click here to read the full RegInsight on CUBE’s RegPlatform