What is one of the main functions of the FRC in promoting audit quality?

One of the main functions of the Financial Reporting Council (FRC) in promoting audit quality is the issuance of International Standards on Auditing (ISAs) and ethical standards. These standards are crucial in establishing a framework for auditors to follow, ensuring that the audit process is conducted with integrity, objectivity, and transparency. By providing these guidelines, the FRC helps to enhance the quality and consistency of financial reporting and auditing practices across the industry.

The issuance of ISAs and ethical standards not only aids auditors in performing their duties effectively but also instills confidence among stakeholders, such as investors and regulators, regarding the reliability of financial statements. This role is essential in maintaining trust in the financial markets and supports the overall goal of promoting high-quality audits that adhere to established best practices.

Other options do not align with the FRC’s primary role in promoting audit quality. For instance, issuing dividends to shareholders is related to corporate finance rather than audit practices. Regulating tax policies is also outside the scope of the FRC, as it focuses more on financial reporting standards and the auditing profession. Similarly, while providing financial support to struggling firms may be a necessary action in some contexts, it does not directly contribute to the quality of audits or the oversight of auditing practices