Our global response to the Audit Firm Governance Code
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 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 takes effect for our fiscal year beginning 1 July 2010.
At Ernst & Young, 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 intend therefore to ask 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 Ernst & Young on the GAC will bring to the senior leadership of our global organization the benefit of significant outside perspectives and views. We believe it also is consistent with our public interest obligations. We anticipate appointing four INEs to the GAC in the near future. We expect to include leaders with globally diverse backgrounds in regulation, business, public service or academia. These individuals will bring a wealth of experiences and important considerations to our organization.
Our 2010 Global Transparency Report includes all disclosures required by the Code.
Check here for more information on our
response to the Audit Firm Governance Code.
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