Trials using the IPR at 20 accounting firms in the UK have shown that companies with a turnover up to £4.8m – expected to be announced as the new audit threshold – could save up to £2,400 a year, the equivalent of 61% of the previous year’s audit fee.
For smaller companies the savings were put at 27% of the previous year’s audit fee, or £1,100.
But, concerns remain over its effectiveness primarily due to the prohibition on corroboration. The IPR process is based on analytical review only, and not risk assessment.
The trials tested whether an IPR provided cost savings, how effective it was at identifying financial errors and whether directors, accountants and other third parties, such as banks, understand the level of assurance it offers.
Led by the UK’s Auditing Practices Board the research will help the government make its decision on whether to raise the audit threshold to the European maximum of £4.8m. An announcement is expected imminently.
UK senior partner Phil Verity has been elected for a second term at Mazars
An audit partner has been appointed at Grant Thornton in its North West offices
KPMG has been appointed with “immediate” effect as the auditor of Dorcaster
The audit for Ibstock will be taken over by Deloitte following a competitive tender process