Published date: 12 July 2022

This notice was replaced on 20 September 2022

This notice does not contain the most up-to-date information about this procurement. The most recent notice is:

Awarded contract (published 20 September 2022)

Closed opportunity - This means that the contract is currently closed. The buying department may be considering suppliers that have already applied, or no suitable offers were made.


Contract summary

Industry

  • Financial consultancy, financial transaction processing and clearing-house services - 66170000

  • Accounting, auditing and fiscal services - 79200000

  • Miscellaneous business and business-related services - 79900000

Location of contract

EC2Y 5AS

Value of contract

£30,000 to £49,000

Procurement reference

FRC2022-054

Published date

12 July 2022

Closing date

4 August 2022

Closing time

12pm

Contract start date

30 September 2022

Contract end date

30 September 2023

Contract type

Service contract

Procedure type

Open procedure (below threshold)

Any interested supplier may submit a tender in response to an opportunity notice.

This procedure can be used for procurements below the relevant contract value threshold.

Contract is suitable for SMEs?

Yes

Contract is suitable for VCSEs?

Yes

Description

The purpose of the Financial Reporting Council (FRC) is to serve the public interest by setting high standards of corporate governance, reporting and audit and by holding to account those responsible for delivering them.

In February 2021, the FRC published the revised Operational Separation Objectives, Outcomes and Principles (the 'Principles'). Through Operational Separation, we intend to:
i) Improve audit quality by ensuring that people in the audit practice are focused above all on delivery of high-quality audits in the public interest.
ii) Improve audit market resilience by ensuring that no material, structural cross-subsidy persists between the audit practice and the rest of the firm.

The revised principles for operational separation of the audit practices have voluntarily been adopted by the largest four audit firms in the UK. The objective of operational separation is to ensure that audit practices are focused above all on delivery of high-quality audits in the public interest, and to improve audit market resilience by ensuring that there is no subsidy between the audit practice and the other service lines.

Through the principles the FRC limits the scope of service that can be delivered by firms' audit practices mainly to undertaking statutory audits and related work. However, to deliver on a statutory audit especially for large and complex audited entities, the audit practice will need expertise which may not necessarily be located within the audit practice but may have to be borrowed from the other service lines in the firm for example: actuaries, valuers, IT specialists etc. In accordance with the Principles, we would expect the firms to charge these expert resources at arms' length prices (similarly if auditors work on engagements/ projects in other service lines then they would also need to be charged at an arm's length price). This will ensure that there is no subsidy between the audit practice and the other parts of the firm, and thus that audits are priced to reflect the economic reality.

The aim of this project is to engage an Expert Reviewer on transfer pricing, who will review the four largest audit firm's transfer pricing methodologies and policies for operational separation.

The transfer pricing expert should undertake a design effectiveness review of the transfer pricing methodology and policies used by the four largest audit firms in implementing the Operational Separation Principle on arm's length pricing.

The report should detail:
1. For each firm, the appropriateness of and the risks and issues arising from the firms' methodologies and policies for transfer pricing.
2. A comparison between the firms' arm's length pricing methodologies and policies to form a view as to whether, overall, there is a level playing field, given the firms' differences in approach.
3. An opinion on whether there is any potential for improvement, and related recommendations.

See attached Invitation to Tender (ITT) document.

More information

Attachments

Additional text

Notes:-

• Download and review the documents;

• Observe the timelines and tender process

• Register your interest in this opportunity by email to procurement@frc.org.uk

• You will need to register your interest in this opportunity to receive the Q&A responses.

About the buyer

Contact name

Head of Procurement

Address

8th Floor, 125 London Wall
LONDON
EC2Y 5AS
England

Telephone

020 7492 2300

Email

procurement@frc.org.uk

Website

www.frc.org.uk