Relating to the Big Four and FTSE 350 firms, the proposals relate to promoting “high-quality audit and audit market resilience”.
Going forward, the code will also apply to other companies that audit “significant numbers” of public interest entities.
The proposals come amid the operational separation of audit practices at the Big Four’s audit arms, and are designed to “embed a continued focus on the public interest and audit quality” of said groups.
The FRC said that the revisions will enhance and clarify the role of partnership boards in holding management to account, as well as separating the roles of board chair and senior partner or chief executive.
The proposals also cover criteria for board composition and independent non-executives within audit firms to “further strengthen oversight and governance”.
Finally, the FRC’s consultation will address the importance of long-term sustainability, people, culture, and employee engagement.
Mark Babington, executive director of regulatory standards at the watchday, said: “Well governed audit firms that act in the public interest are more likely to deliver high-quality audit on a consistent basis.
“Audit firms which have applied the Audit Firm Governance Code have used it as a catalyst for introducing both external challenge into their operations and for improved levels of oversight.”
He added that the proposals will “provide a springboard” for future initiatives to improve “audit quality and market resilience”.