LONDON, May 27 (Reuters) - Britain's accounting watchdog on
Thursday tightened fraud prevention standards in the wake of
sharp criticism by parliamentarians after the high-profile
collapses of companies such as retailer BHS and builder
Carillion.
The Financial Reporting Council (FRC), criticised by
lawmakers for being too timid in regulating auditors, said it
wanted to increase clarity about an auditor's obligations.
The revisions, effective for audits of periods beginning on
or after 15 December, include more stringent requirements to
identify and assess the risk of material misstatement because of
fraud and the procedures to respond to those risks.
The FRC announcement comes amid a government-led plans to
restore trust in audit and corporate governance.
This includes statutory requirements for directors to report
on the steps they have taken to prevent and detect material
fraud and for auditors to report in relation to such a
director's statement.
The FRC is undergoing an internal transformation to become
the more powerful Audit, Reporting and Governance Authority or
ARGA.
(Reporting by Kirstin Ridley, editing by Huw Jones)