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Audit News issue: 72 November 2022

Journal

Published: 10 Nov 2022 Update History

Welcome to Audit News 72, your regulatory update containing the latest technical guidance and best practice advice.

PIE audits: new registration requirements

The regulatory regime for firms auditing Public Interest Entities (PIEs) is changing. We look at new FRC registration requirements, plans to expand the definition of a PIE, and what audit firms need to consider now and in future.

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Risk alert for new audit tenders

As ICAEW registered auditors will be aware, in response to changes in the audit market, the growth of challenger firms and some more complex audits moving away from the largest audit firms, we have increased our activities to monitor the audits undertaken across firms registered for audit with ICAEW.

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Auditor resignations: your responsibilities

The number of UK companies seeking new auditors has risen sharply in the last couple of years. This has shined a spotlight on the resigning auditors’ responsibilities to issue cessation statements under section 519 of the Companies Act 2006. ICAEW’s Quality Assurance Department would like to remind audit firms of their responsibilities in this area.

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Good practice when taking on new audits

Recent intelligence shows that there are significant numbers of UK companies seeking new auditors and that the audit tender market is buoyant. Audit firms that evolve and enhance their client acceptance procedures adapting to current market risks are well equipped to make informed decisions when choosing to accept new audits into an existing portfolio. 

ICAEW’s Quality Assurance Department would like to share examples of good practice that has been identified during recent calls and visits to audit firms.

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Local audit quality inspection results published

88% of financial audit reviews carried out by ICAEW’s Quality Assurance Department (QAD) in 2021-22 were graded good or generally acceptable.

The results of these reviews form part of the Financial Reporting Council’s (FRC) summary report on 2021/22 local audit inspections. Overall, the FRC rated 70% of local audits as good or only requiring limited improvements.

Watch our short video which summarises the findings of QAD’s public sector monitoring activity in 2021-22.

Watch the video
View the slides

Trevor Smith, Director, Quality Assurance said “While recognising there are areas for improvement, we are pleased to see that the number of audits categorised as good or requiring limited improvements has remained consistent with 2020/21.”

As the sole Recognised Supervisory Body (RSB) for local audit, ICAEW is responsible for the licensing, registering and monitoring of auditors who carry out audits of relevant authorities, as defined in schedule 2 of the Local Audit and Accountability Act 2014.

 

Quality assurance monitoring: view from the firms

ISA 600: what’s new in group audits?

New requirements for the audit of groups are being introduced for periods beginning on or after 15 December 2023. What are the key changes and what will this mean for you as a group or component auditor?

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Compliance reviews: a positive learning experience

Annual compliance reviews help firms and individuals ensure they continue to meet their regulatory obligations. Whether your reviews are mandatory or good practice, experts from ICAEW’s Quality Assurance Department offer some advice on how to make the most of the process.

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Enhanced ICAEW membership

From January 2023, all ICAEW members will have access to additional content from the faculties and communities as part of their ICAEW membership. ICAEW affiliates will continue to receive access to all the same resources as currently.

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Quality Assurance monitoring feedback results