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Pace of change

Avoid confusion around the alternative provisions and exemptions for audits of smaller entities in the FRC Revised Ethical Standard, with clarification from QAD reviewer Henrietta Thompson.

Ethical behaviour is fundamental to audit quality and user confidence in the audit opinion. The Financial Reporting Council (FRC) Revised Ethical Standard 2016 (ES) sets out the principles and specific requirements which firms must follow. In this article we’re going to look at the alternative provisions and exemptions available for audits of small entities, and areas where we find firms can fall down.

The Provisions Available for Audits of Small Entities are in Part B, Section 6 of the FRC ES (and they are derived from the previous Auditing Practices Board ES-PASE, with limited changes). Firms most frequently use these different requirements in respect of non-audit services.

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