RegulationAccounting StandardsICAEW questions FRC commitment to international auditing standards

ICAEW questions FRC commitment to international auditing standards

ICAEW suggests FRC policy on auditing standards could damage its global standing

ICAEW questions FRC commitment to international auditing standards

THE FRC’s decision to set auditing standards before international consensus has emerged could damage its global standing and create confusion for investors, the ICAEW has warned.

In a letter sent to the FRC, the institute suggested that attempts to influence the international debate on auditing standards by “acting first” would make it difficult for auditors to “prepare comprehensible audit reports” that meet both UK and international requirements and that such reports would be “cumbersome and repetitive”.

Last year, the FRC made changes to the UK’s auditing regime, including new reporting disclosures in which auditors must provide an overview of the scope of the audit showing how it addressed the risk and materiality considerations.

Those changes differ slightly from recommendations being considered at a global level by the IAASB. For instance, the IAASB proposals require going concern statements to be made in all cases while the FRC’s requirements do not. Additionally, the FRC’s requirement to report on the application of materiality would be dealt with as an ‘other matter’ rather than a ‘key audit matter’ under the IAASB’s proposals.

By acting alone, the FRC is “likely to weaken the UK’s influence internationally”, the ICAEW said in its response to the FRC’s invitation to comment on the IAASB proposals.

“There are well-resourced bodies within and outside the UK who are fully committed in word and deed to international standards on auditing and they will, quite naturally, be more clearly heard at the top table than jurisdictions which choose to go their own way,” the ICAEW said.

The institute went on to question the FRC’s very commitment to international auditing standards

“We do not really understand why the FRC is asking whether it should seek to implement the IAASB’s proposals in place of its own at this stage, when it has already made it clear by its actions that it does not intend to do so.

“We are concerned that the FRC’s actions indicate that it may no longer be committed to ISAs.”

Related Articles

Membership of the accountancy profession on the rise

Accounting Standards Membership of the accountancy profession on the rise

3m Alia Shoaib, Reporter
Treasury Select Committee report released on Making Tax Digital

Accounting Standards Treasury Select Committee report released on Making Tax Digital

9m Stephanie Wix, Writer
New Year Honours of 2017

Accounting Standards New Year Honours of 2017

9m Stephanie Wix, Writer
Record fine for Deloitte and audit partner over Aero misconduct

Accounting Standards Record fine for Deloitte and audit partner over Aero misconduct

11m Stephanie Wix, Writer
'Clear' tax avoidance guidance for advisers issued by institutes

Accounting Standards 'Clear' tax avoidance guidance for advisers issued by institutes

12m Stephanie Wix, Writer
Ex-RSM Tenon CEO fined; ex-FD and PwC face complaints over its accounting

Accounting Standards Ex-RSM Tenon CEO fined; ex-FD and PwC face complaints over its accounting

10m Kevin Reed, Writer
Sports Direct implements FRC corrections in annual reporting

Accounting Standards Sports Direct implements FRC corrections in annual reporting

10m Stephanie Wix, Writer
Watchdog launches audit investigation into Sports Direct

Accounting Firms Watchdog launches audit investigation into Sports Direct

11m Stephanie Wix, Writer