The U.K.'s Financial Reporting Council prohibited audit firms from providing recruitment and remuneration services to public interest entities they audit as part of efforts to strengthen auditor independence.

The body, which also disallowed accounting firms to play any part in management decision making, updated its ethical standards to state that firms will only be allowed to provide non-audit services that are closely related to the audit or are mandated by law.

"This will dramatically reduce the risk of a damaging conflict of interest, where the commercial interests of an auditor are perceived to be the most important factor in an audit relationship, rather than a focus on high quality audit," the authority for audit in the U.K. said.

Low quality audits and potential conflicts of interest have dimmed confidence in audit amid corporate failures.

The four biggest audit firms could lose millions of pounds in revenue as a result of the revised standards, the Financial Times reported.