The institute has already voiced its support for a ‘properly formulated Independent Professional Review’ in a consultation paper to the government’s Company Law Review steering group.
But, the English ICA has said further investigation is needed to decide whether an IPR can be provided ‘cost effectively and with a meaningful level of assurance’.
Roger Housechild: ‘We need to achieve a common understanding of who will benefit from this new type of review engagement, what sort of benefits they will gain and how much the IPR will cost, before we can reach a definitive decision on their introduction.’
The idea to substitute the annual statutory audit with an IPR for companies with a turnover of £1m or less is part of the wide-ranging Company Law Review process. Trade secretary Stephen Byers mooted the idea following the hike in the statutory audit threshold from £350,000 to £1m, effective from July 2000.
But, the proposal has split the profession with many accountants viewing it as a positive change, while others see it as work which offers no real benefit to users of accounts or companies.
ACCA’s Audit Committee chairman Johnathan Beckerlegge, recently said: ‘In our view the new proposals will provide little more assurance than would normally be obtained from the simple involvement of a qualified accountant in the preparation of the accounts.
Peter Mitchell, chairman of the Small Practitioners Association, criticised the concept as ‘an unnecessary piece of work to be imposed on small companies’.
The institute’s demand comes in response to a discussion document issued by the Auditing Practices Board to illustrate what an IPR might look like. The deadline for submissions was 31 July 2000.
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