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Faculty news: May 2023

Helpsheets and support

Published: 12 May 2023 Update History

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Stay on top of recent Audit and Assurance Faculty developments, as well as recent and upcoming faculty webinars and other important events for your diary.

Fresh perspectives on corporate fraud

Sharpening the focus on corporate fraud: an audit committee perspective has been published by the Audit and Assurance Faculty. It’s the second of two interview-based publications and follows Sharpening the focus on corporate fraud: an audit firm perspective (published in July 2022).

The latest report is based on interviews on the subject of fraud conducted with 14 experienced members of audit committees. You can learn more about their perspectives on corporate fraud and get an overview of the report in an ICAEW Insights article.

An Audit & Beyond article will follow up with more detail, sharing key themes and concerns among audit committees and perspectives from individual interviewees. It will also highlight insights that will be of particular interest and useful to auditors.

Some audit firms yet to implement ISQM 1

International Standard on Quality Management (UK) 1 (ISQM 1) replaced ISQC 1 on 15 December 2022 and all active audit firms are required to implement the new standard. ICAEW’s Quality Assurance Department (QAD) explains its expectations of ISQM 1 implementation and will review evidence of this as part of its audit monitoring visits. 

The results of a survey by QAD of 150 randomly selected (non-PIE) audit firms indicate that:

  • 67% of those firms have adopted ISQM 1;
  • 17% have started preparation but not yet completed implementation; and
  • 16% of firms have not yet started implementation (including a small number of non-responders with very limited audit portfolios).

Comments from survey respondents that have adopted ISQM 1 are very positive about the value of the new standard. 

QAD urges the small minority of firms that haven’t put it in place to act quickly. 

Quality management in audit firms provides resources to help audit firms prepare for the new quality management standards ISQM 1, ISQM 2 and ISA 220 (Revised).

Good professional judgement

ICAEW’s new professional judgement hub brings together resources to help you develop your skills in approaching difficult judgements. Resources range from articles and helpsheets to podcasts and films. 

The importance of good professional judgement in audit is the subject of a film featuring expert insights from Jack Kelly, Audit and Assurance Head of Quality and Risk for North and South Europe at Deloitte, and Sir Andrew Likierman, former Dean and now Professor of Management Practice in Accounting at the London Business School.

Learn more in an ICAEW Insights article.

New ICAEW disciplinary framework

On 1 June 2023, revisions to ICAEW's disciplinary framework come into effect. 

The updated disciplinary framework clarifies processes and improves overall transparency and accessibility. It will provide greater efficiency by improving the speed of investigations and disciplinary proceedings. The Appeal and Fitness to Practise Regulations are also updated. 

Core aspects of the existing disciplinary framework and fitness regulations and processes will be maintained, while the new framework is simpler and easier to understand for all parties, including complainants and interested third parties.

Change coming to CPD regulations and firm responsibilities

From 1 November 2023, ICAEW is introducing revised Continuing Professional Development (CPD) Regulations, including a minimum number of hours and specific responsibilities for firms

A hub page has been created with resources and support to help you understand what the changes will mean for you as an individual – and for firms.

Guidance on implications of licensing technology to clients

It is increasingly common for professional services firms to license software or other technology to clients who then sell or license the software or other technology to third parties. The many different ways in which such transactions can be structured and sometimes linked mean that:

  • there may be independence issues for the firm in relation to the client to which the software or other technology is sold; and
  • careful consideration needs to be given to independence issues in situations in which the firm is considering appointment or re-appointment as the auditor of the third party. 

The Audit and Assurance Faculty has published a guidance document highlighting key areas for firms to consider.

Faculty name change

The Financial Reporting Faculty has changed its name to the Corporate Reporting Faculty. This reflects the fact that reporting requirements today are about much more than financial information, particularly in the areas of non-financial reporting and sustainability reporting.

Learn more about the name change and more about the Corporate Reporting Faculty.

EVENT: ISA 600 – what’s changing?

New requirements for the audit of groups are being introduced for periods beginning on or after 15 December 2023 in a revised ISA 600 Special Considerations – Audits of Group Financial Statements (Including the Work of Component Auditors) from the International Auditing and Assurance Standards Board (IAASB) and a revised ISA (UK) 600 from the Financial Reporting Council (FRC). 

Book your place at our webinar on 29 June, to understand how the ISA is changing and ways that group and component auditors will be affected. The speakers will be Matthew Howells (Evelyn Partners) and Catherine Hardinge (Price Bailey).

ISA 315 – Intelligent auditing: robust assurance

The revised risk identification and assessment standard ISA 315 brings renewed focus to controls, information technology (IT) and general IT controls evaluation, introducing mandatory procedures. In our recorded webinar Paul Winrow (Mazars) and Rhodri Whitlock (HPL Associates) share some practical insights into how to apply key changes in the revised ISA efficiently and effectively.

Faculty webinar library

Our library of webinar recordings covers matters including:

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

Technical update

Recent International Audit and Assurance Standards Board news highlights include: 

Recent Financial Reporting Council news highlights include:

  • a consultation on proposed amendments to audit enforcement procedures;
  • the new FRC Technology & Digital hub to provide information on FRC work in this area and how it fits into its wider strategy;
  • updates to the FRC’s Our approach to audit supervision document, outlining how it supervises audit firms; and 
  • new guidance on Audit Firm Eligibility Criteria, in the context of the firm’s system of quality management and the performance of engagements. ISQM (UK) 1 and ISQM (UK) 2 have been reissued with updated footnotes to reflect this guidance.

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 covered during 2022 included, for example:

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

Faculty news

Stay on top of recent Audit and Assurance Faculty developments, as well as recent and upcoming faculty webinars and other important events for your diary.

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