Scottish Financial News reported yesterday that the FRC announced a consultation on proposals to update and strengthen the Audit Firm Governance Code in support of the FRC’s objectives to promote high-quality audit and audit market resilience.

As part of the proposals, the regulator would require different people to be appointed to chairman and managing or senior partner roles.

While most of the Big Four accounting firms have separated these roles, at EY they are held in the UK by Hywel Ball. The proposal is likely to put pressure on the company to overhaul its governance structure or explain to the accountancy regulator why it wants to keep both roles with one person.

The FRC’s plan to revise its audit firm governance code comes amid wider calls to shake up the industry, reduce conflicts of interest and improve the quality of audits, The Times reports. 

The shake up comes after a series of accounting scandals, including the collapse of Carillion in 2018. Plans include an operational separation of the consulting and audit divisions of the Big Four, which comprise of EY, Deloitte, PwC and KPMG and would also see a new regulator introduced to replace the FRC.

Splitting the senior or managing partner roles from the chairman’s job would bring accountants into line with the governance for listed companies.

An EY spokeswoman said: “We will be reviewing the proposals and responding in due course.”