Key reminders for audit busy season
15 January 2020: for many auditors, January is the start of busy season. In this article we outline some key reminders.
For periods commencing on or after 1 January 2019, remember:
- Entities reporting under FRS 102 are required to apply the triennial review amendments, so should be applying FRS 102 (March 2018). You can read more about the amendments on the triennial review webpage.
- Entities reporting under EU-adopted IFRS are required to apply IFRS 16.
It’s worth noting that IFRS 16 does not apply to entities reporting under FRS 102 – they should continue to account for leases under Section 20 of FRS 102.
Significant changes to the ISAs (UK), most notably ISA (UK) 540 Auditing accounting estimates and related disclosures and ISA (UK) 570 Going concern, are effective for periods commencing on or after 15 December 2019. It’s worth looking ahead to see how these changes might affect you and your clients.
For earlier periods, if you’re unsure what to include in the auditor’s report in relation to going concern, have a look at the helpsheet Audit reports – going concern.
The Companies (Miscellaneous Reporting) Regulations 2018 introduced a variety of reporting requirements for periods commencing on or after 1 January 2019. For large companies this includes the requirement for a "s172 statement". Further information is available in the ICAEW guidance The strategic report and how to prepare one.
The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 also introduced new carbon and energy reporting requirements for large companies and LLPs.
In addition to some of the headline changes above, don’t forget to:
- ensure you are sufficiently independent to take on the audit;
- plan early and allocate staff with the right skills and expertise to undertake the work;
- communicate clearly with the client, set realistic deadlines for information to be received and keep the client informed of progress (try to avoid last minute surprises);
- identify as early as possible whether there have been changes in the group structure (don’t forget to consider the FRC SGN 02/2018 - Group guidance too);
- apply professional scepticism; and
- keep an eye out for changes to legislation as a result of Brexit.
If you’re an ICAEW member, affiliate or member of staff in an eligible firm with member firm access, you may discuss your specific situation with the Technical Advisory Service on +44 (0)1908 248 250.