Richard Moriarty, chief executive of the FRC, wrote this week to the bosses of the UK’s top accounting firms stating that the FRC was not against private equity investment in the sector in principle, but there were risks that needed to be managed in the process. 

The letter outlines the FRC’s approach to potential changes in ownership structures, emphasising the need to maintain audit quality, independence, and public interest focus.

The intervention by the watchdog highlights the FR’s concerns that private equity investment could impact audit firms’ rigour and independence in auditing the accounts of large companies.

The FRC has said that it encourages early engagement with the FRC for firms considering such changes and reaffirms the FRC’s commitment to monitoring developments in this area.