THE DESCRIPTION of the scope of UK audits has been expanded to cover the whole of the annual report.
The Auditing Practices Board, part of the Financial Reporting Council, revised the UK auditing standard short form description of the scope of UK audits.
It now refers to the auditor’s responsibility under international standards for auditing ((ISA) UK and Ireland) to read all the financial and non-financial information in the annual report to identify material inconsistencies with the financial statements.
“Investors and other users of annual reports regard the auditor’s involvement with the financial and narrative “other information” included with the financial statements to be of increasing importance,” said Richard Fleck, APB chairman.
“The APB, therefore, has amended the description of the auditor’s responsibility included in the auditor’s report to refer to the auditor’s obligation to read such other information with a view to ensuring that there are no material misstatements or inconsistencies between it and the financial statements.”
The revision affects audits for UK companies for periods ending on or after 23 March 2011.
More details of the revision can be found here.
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