FRC says it’s still commitment to international auditing standards
The FRC has stated that it is still committed to the international auditing standards and has defended its decision to make changes to the UK auditing rules before recommendations are agreed at a global level.
The ICAEW criticised the FRC for implementing new audit standards when global changes were only being discussed. Read more here in our previous blog Global changes need to be made to auditor reporting rule
The FRC have defended their decisions to update their auditing standards saying “Our commitment to the development of fit for purpose UK standards, in our minds necessarily involves a commitment to developing international standards and solutions.” “We do not see our work as competing with that of others but rather of complementing it.”
The FRC have introduced some changes to the UK’s auditing regime which includes new reporting disclosures in which auditors must provide an overview of the scope of the audit showing how it addressed the risk and materiality considerations.
These differ slightly from the IAASB’s proposals, which require going concern statements to be made in all cases. Also the FRC’s requirement to report on the application of materiality would be dealt with as an ‘other matter’ rather than a ‘key audit matter’ under the IAASB’s proposals.
Talks on the European Union imposing mandatory audit rotation on auditors have been put on hold. The negotiations are to get companies to change their auditors every ten years, but these have now been placed on hold because of disagreements over the package of legislative measures. Read more in our previous blog Talks over the EU 10 year audit rotation have been put on hold.
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