John delves into the detail behind some imminent changes to auditors' reporting responsibilities.
Q) How much more work do I need to do when reporting on narrative reporting in financial statements under the new Companies Act Requirements
A) For anybody wondering "What new requirements?", I did mention the change in my Q&A back in September 2015, albeit fleetingly.
So that everyone is up to speed, under the Companies, Partnerships and Group (Accounts and Reports) Regulations 2015 (SI 2015/980), the auditor must now:
a) state whether, in his opinion based on the word undertaken in the course of the audit:
- the information given in the strategic report (if any) and the directors' report for the financial year of which the accounts are prepared is consistent with those accounts; and
- any such strategic report and the directors'' report have been prepared in accordance with applicable legal requirements.
b) state whether, in light of the knowledge and understanding of the company and its environment obtained in the course of the audit, he has identified material misstatements in the strategic report (if any and the directors'' report; and
c) if applicable, give an indication of the nature of each of the misstatements referred to in (b). The big change relates to the strategic report and the director's report in (a).
This is an extract from an article in the February 2016 edition of Audit & Beyond, the magazine of the Audit and Assurance Faculty.
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