PracticeAuditOpinion split on IPR

Opinion split on IPR

Accountancy bodies today gave a mixed reaction to the results of research into the benefits of the independent professional review.

The Auditing Practices Board this morning said that research into the IPR revealed significant cost savings for companies with a turnover between £1m and £4.8m.

The ICAEW, which in an unexpected u-turn earlier this year withdrew its support for the IPR, reserved judgement on the results.

Michael Groom, ICAEW president, said: ‘I believe that many small and medium-sized enterprises in the future will choose to be audited irrespective of the level of the audit exemption threshold.’

In contrast ACCA, which remains committed to a full mandatory audit for all companies with turnovers in excess of £1m, was more upbeat on the results.

Jonathan Beckerlegge, chairman of ACCA’s auditing committee, said: ‘The IPR work in the field trial was stronger than first proposed. Going concern was addressed and material errors were picked up in 40% of the IPRs. If further strengthening of IPR could be achieved without piling on costs it could be useful to shareholders and others.

‘If the government were to remove the requirement for audit for companies under £4.8m turnover entirely, it would be as dangerous as tackling road congestion by removing all the traffic lights.’

The government will consider the research to decide whether to mandate, or simply endorse, the IPR if it raises the audit exemption threshold to the European maximum of £4.8m.

Ian Plaistowe, APB chairman, and David Hatherly, APB board member, said concerns remained over how effective an IPR is at detecting financial misstatements.

Links

IPR gets test approval

Audit threshold to rise to £4.8m

Related Articles

Is predictive analytics the end of the annual audit?

Audit Is predictive analytics the end of the annual audit?

1d Martin Herron, MHA MacIntyre Hudson
Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

Audit Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

6d Emma Smith, Managing Editor
PCAOB sanctions former Deloitte Turkey CEOs over altered documents

Audit PCAOB sanctions former Deloitte Turkey CEOs over altered documents

2w Alia Shoaib, Reporter
KPMG South Africa to review past audit work amid fresh scandal

Audit KPMG South Africa to review past audit work amid fresh scandal

1m Alia Shoaib, Reporter
FRC introduces £10m sanctions for Big Four firms

Audit FRC introduces £10m sanctions for Big Four firms

1m Alia Shoaib, Reporter
Ukraine’s PrivatBank files $3bn claim against PwC

Audit Ukraine’s PrivatBank files $3bn claim against PwC

2m Alia Shoaib, Reporter
Grant Thornton to exit FTSE 350 audit market, citing Big Four dominance

Audit Grant Thornton to exit FTSE 350 audit market, citing Big Four dominance

2m Alia Shoaib, Reporter
Big Four dominate FTSE 250 audit market in Q1 rankings

Audit Big Four dominate FTSE 250 audit market in Q1 rankings

3m Alia Shoaib, Reporter