Our global response to the Audit Firm Governance Code
In January 2010, the UK Financial Reporting Council and The Institute of Chartered Accountants in England and Wales issued a Governance Code (the Code) for audit firms. The purpose of the Code is to promote confidence and choice in the UK audit market and to provide a benchmark of good governance practice. The Code took effect for our fiscal year beginning 1 July 2010
At EY, we see the publication of the Code as a real opportunity. Over the past few years, we have moved aggressively to integrate our organization and strengthen our ability to provide seamless, consistent, high-quality service worldwide. For us, much of our ability to do this depends on strong governance and tone at the top. We have to be looking at risks broadly, serving the right clients, making the right investments and sending talent where it is most needed. This is how we strengthen audit quality
So, although the Code technically applies only to our UK business, as a globally integrated organization we believe it is most appropriate for us to implement the Code’s provisions on a global basis. This includes one of the important provisions of the Code — the requirement to appoint independent non-executives (INEs). We have asked the INEs to join our Global Advisory Council (GAC), our main governance body. The GAC oversees global strategies, business plans, important appointments and the public interest aspects of our decision-making.
Including individuals from outside EY on the GAC will bring to the senior leadership of our global organization the benefit of significant outside perspectives and views. We believe it is also consistent with our public interest obligations. As of September 2011, we have appointed three INEs to the GAC and we intend to appoint two more in the near future. They are leaders with globally diverse backgrounds in regulation, business or public service. These individuals will bring a wealth of experiences and important considerations to our organization.
Our 2011 Transparency Report: EY Global includes all disclosures required by the Code.