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Brexit: FRC guidance for auditors

BEIS and the FRC have issued on 22 February 2019 five documents that set out the necessary steps all audit firms (large and small) should undertake to prepare for Brexit including no-deal outcomes.

These are available on the FRC website and include;

  • Guidance on auditor registration
  • A supporting decision tree
  • Briefing on third country registration
  • Guidance on accounting treatment
  • Guidance on applications of International Accounting Standards (IAS)

The guidance includes commentary and Q&As that cover a number of areas. Points we particularly draw to your attention are;

  • The removal of non-financial services entities with EU listings but not UK listings from the UK definition of PIE.
  • The amendments to the Companies Act include the extension of the non-audit services blacklist to all overseas subsidiaries of UK PIEs (previously confined to EEA subsidiaries).
  • The registration with EU27 countries for UK entities with EU27 listings is aided by a list of the relevant competent authorities to apply to. Access guidance on the relevant EU Form B in the context of Ireland.
  • The guidance only covers registrations from the UK. The Republic of Ireland has not yet issued parallel guidance.
  • The validity of an audit report issued after 29.3.19 for work undertaken under the pre-Brexit framework needs to be checked with the relevant competent authority. For Ireland, the current guidance is that reports cannot be signed after this date unless registration is effected as a third country auditor.

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