ICAS is worried smaller audit firms will not have the necessary resources to undertake the system changes and training required by 2005.
ACCA mirrored these concerns for small firms, but also believes the standards are in some ways inappropriate for this type of auditor. ‘In a push to get approval from financial regulators, the IAASB (International Auditing and Assurance Standards Board) has moved towards producing larger, more involved standards,’ said David York, head of ACCA’s auditing practice.
‘It has almost become a methodology rather than standards and some of the methodologies don’t work quite as well for smaller firms.’
At present, all UK companies with a turnover of £1m or above require an annual audit. This might soon rise to the European maximum of £4.8m.
Overall, though, the introduction of a mandatory standard has been welcomed as a positive step in raising the bar for audits across Europe, and the ability of larger auditors to adopt the standards is not in question.
But ACCA is calling for the international regulator to concentrate on the principles of audit and to produce core standards that are brief and to the point. Guidance could then be added where necessary for larger firms and the public sector.
The ICAEW joined the debate by hinting that some smaller firms might struggle to meet the 2005 deadline.
However, it was still enthusiastic about the proposals. ‘This is a big challenge for the profession as a whole,’ said Robert Hodgkinson, technical director at the ICAEW. ‘You can’t guarantee that it will all happen in that timeframe but it is pointless giving up before we’ve even tried.’
The institute has held the policy that all audits in the EU should be carried out in accordance with international standards since November 2001 and as such Hodgkinson said it was welcoming of the EC communication on reinforcing the statutory audit. He added, however, that much of the detail still needed to be worked out.
Two new audit partners have been appointed at the firm BDO in its audit practice following continued growth and investment
Investment in people, tech and businesses impacts on EY's profit per partner figure
If businesses do not take cyber security seriously in their business planning regulators may do it for them, the ICAEW has warned
Dr Richard Willis provides a several thousand-year history lesson of the profession, from origin to modern-day