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John Selwood's Audit Clinic

In this edition John tackles some interesting and surprising questions on the audit of micro companies.


Is it possible to audit a company adopting FRS 105 and the micro-company regime?


Yes. This might be my briefest answer yet and will only be beaten by answering no. Despite its brevity, it might also be one of my least popular answers. Many auditors feel uncomfortable auditing an accounting framework that they consider to be poor quality, because the accounts are merely presumed to show a true and fair view. In other words accounts prepared under FRS 105 only purport to show a true and fair view without actually doing so. The accounting is very simplistic when compared to other frameworks and the presentation and disclosure is minimal.

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