With the withdrawal of Practice Note 16, Katharine Bagshaw and Phil Lenton offer pointers on why and how some firms will need to consider the implications carefully.
After a brief consultation, in July 2017 the Financial Reporting Council (FRC) withdrew Practice Note 16 Bank Reports for Audit Purposes in the UK (PN 16), with effect from 15 December 2017. This withdrawal may have some significant implications for approaches to the audit of bank and cash by some firms.
In the November 2017 edition of Audit & Beyond, we considered why and how, focusing on matters around the value of bank confirmations and internet banking screen shots as audit evidence.
In this follow-up we focus on risk and fraud and other matters such as data analytics and internal control issues.
This article also shares more insights based on the interviews we conducted with practitioners from a wide range of firms, training providers, staff at the FRC and ICAEW’s Quality Assurance Department (QAD), prior to the withdrawal of PN 16.
To date, the wording in PN 16 has led Hirms to obtain conHirmations as a matter of course, regardless of risk or the other evidence obtained, as the PN stated: '…it will not normally be practical to obtain sufficient appropriate audit evidence from other sources'.
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