The Financial Reporting Council (“FRC”) is consulting on proposed changes to the Guidance for Audit Committees to support the changes to UK Corporate Governance Code and to give effect to the FRC’s Effective Company Stewardship proposals. The proposed changes to the auditing standards are mainly directed at: (i) enhancing auditor communications by requiring the auditor to communicate to the audit committee information that the auditor believes the committee will need to understand the significant professional judgments made in the audit; and (ii) extending auditor reporting by requiring the auditor to report, by exception, if the board’s statement of why the annual report is fair and balanced is inconsistent with the knowledge acquired by the auditor in the course of performing the audit, or if the matters disclosed in the report from the audit committee do not appropriately address matters communicated by the auditor to the committee.