Can we regulate good judgement?

Our 30-minute podcast Carillion five years on: can we regulate good judgement? considers this and other big questions. 

Host Philippa Lamb discusses possibilities and perspectives with guests Iain Wright, ICAEW Managing Director, Reputation and Influence; Sir Andrew Likierman, former Dean and now Professor of Management Practice at the London Business School; audit sector expert Andrew Ratcliffe; and Mark Babington, Executive Director of Regulatory Standards at the Financial Reporting Council.

Topical focus areas for firms

Many audit firms may benefit from focussing on some or all of the areas identified for supervisory focus during 2023/24 by the Financial Reporting Council (FRC).

FRC thematic reviews will align with and complement its monitoring of the new quality standard for audit firms, ISQM 1. The topics will be:

• sampling; 
• root cause analysis;
• hot reviews; and
• service providers and network resources.

The FRC will also pay particular attention to the auditor’s work in: 

• going concern;
• fraud risks;
• climate-related risks, including linkage between audited financial statements and climate-related disclosures elsewhere in the Annual Report; and
• application of the revised risk identification and assessment standard ISA (UK) 315.

What makes a good audit manager – new webinar recording

Balancing the needs of clients, audit teams and responsible individuals can make the role of audit manager a challenging one. Our recorded webinar focuses on the technical, people and project management skills needed to succeed in the role and uses real life examples to identify practical solutions to help improve the quality and efficiency of audits.

Faculty webinar library

Our library of webinar recordings covers matters including:

• hot topics and tips for 2023 audits;
• ways audit firms are sharpening their focus on corporate fraud; and 
• key reminders on the UK’s revised ethical standard.

The library also features a four-part series on auditing accounting estimates under ISA 540 (Revised), focussing on:

• identifying specific risks;
• depreciation and fixed assets;
• provisions; and
• property valuations.

Explore technical and policy issues with UK regulator

An Audit and Assurance Sandbox has been launched by the Financial Reporting Council. The sandbox is a confidential, collaborative space, where relevant parties can discuss ideas and technical issues in audit and assurance policy, for areas such as the application of FRC auditing, assurance and ethical standards; relevant technologies; environmental, social and governance (ESG) issues; and competition.

Technical update

Recent International Audit and Assurance Standards Board news highlights include: 

• support material to help address certain frequently asked questions about investigating exceptions and the concept of performance materiality when performing audit procedures using automated tools and techniques; and

• proposals for a group audit-specific section of the proposed auditing standard for less complex entities. The exposure draft is open for public comment until 2 May 2023.

Recent Financial Reporting Council news highlights include:

• a thematic review of the Big 4 audit firm’s methodologies for IFRS 9, focussing on the audit of Expected Credit Losses for larger banks; and 
• a mythbuster to dispel common misconceptions about corporate governance and stewardship.

For more on developments in auditing and assurance, financial reporting and ethics, visit the Audit and Assurance Faculty’s rolling record of Technical news in brief. 

In case you missed it

The back catalogue of Audit & Beyond offers technical and practical articles on topical and perennial considerations for auditors and pointers to relevant resources. 

Topics during 2022 included, for example:

• audit project management;
• managing stress in the busy season;
• ethical dilemma case studies;
• efficient journals testing; and 
• how to prepare for a QAD monitoring visit.

Faculty resource hubs offer articles and other resources on matters including:

• auditing accounting estimates (on ISA 540); and
• quality management in audit firms (on the ISQMs and ISA 220).

ICAEW Insights articles that may be of interest to auditors include:

• a multi-part Insights special on Audit and Fraud;
• using technology to optimise audit talent; 
• a new Financial Reporting Faculty UK regulation factsheet offering practical tips on Climate-related Financial Disclosure Regulations; and
• how do we audit cryptocurrency?