Signing audit reports
Although there's guidance on signing of audit reports in Audit News 44 and Audit News 45, we still receive questions about how the provisions apply in practice.
In short, the details of the registered auditor and responsible individual that are typed into the audit report must mirror those contained in the national audit registers of the UK and Ireland - which can be checked at auditregister.org.uk and cro.ie/auditors. Nevertheless, the responsible individual can sign freehand with their usual signature. So, in the William Smith example given in Audit News 45, if he is shown on the register as William Smith FCA, that name has to be typed on the audit report, even though he may sign freehand as Bill Smith.
If Mr Smith wishes to have Bill Smith as his formal name on the register, he can email email@example.com asking for the change to be made, but he needs to do this personally and not through third parties. In addition, he needs to note that this change will be reflected on ICAEW’s member record so all his ICAEW correspondence will, in future, be addressed to Bill Smith.
The question is also asked, ‘Which location of the registered auditor should be reported?’ For example, William Smith may be based in London and Manchester, servicing clients in each of those offices. Does he sign the Manchester client reports out of the Manchester office, and the London ones out of his London address?
The requirements set out in section 503 of the Companies Act do not specifically require anything with regard to location, and the nearest authoritative text seems to be ISA700 where paragraph 42 requires the auditor’s report to ‘name the location in the jurisdiction where the auditor practises’. This seems to leave the matter open to discretion.
The content of the audit registers is nevertheless instructive; registered individuals can be only registered in one location. In the context of that register, therefore, location on an audit report ought perhaps to be an attribute of the registered individual, not the client, and that location should be used for all audit reports regardless of the client location or the location of the underlying staff that may perform the work.
As best practice, it would appear that registered location information should be what is disclosed on the face of the audit report. Nevertheless the auditor does have the discretion to vary this if they consider it necessary.