The Auditing Practices Board (APB) of the FRC has today issued for comment a consultation draft of a revision of Practice Note 19 “The audit of banks and building societies in the United Kingdom.” The consultation period ends on 29 October 2010.

The consultation draft updates the current guidance to reflect the issuance of the new ISAs (UK and Ireland) which apply to audits of financial statements for periods ending on or after 15 December 2010 and for changes in legislation. In addition the APB has also revised and enhanced the guidance in a number of areas, including in relation to the audit of accounting estimates and impairment provisions and related disclosures. The APB has also added guidance on bilateral and other periodic meetings between auditors and the FSA.

Richard Fleck, Chairman of the APB and a director of the FRC said,

“Following the publication of the clarified ISAs (UK and Ireland) in October 2009, there is a need to update the APB’s related Practice Notes currently in issue. The APB also considers this an opportune time to enhance the guidance in relation to areas that were identified as being of particular interest in the credit crisis. The APB invites comments on any aspect of the draft guidance. The APB will also have regard to responses to the FSA and FRC joint Discussion Paper on ‘Enhancing the auditor’s contribution to prudential regulation’ when finalising the guidance.”

The consultation draft of Practice Note 19 (Revised) may be downloaded, free of charge, from the Publications (Exposure Drafts) section of this website.
 

1. The FRC is the UK’s independent regulator responsible for promoting high quality corporate governance and reporting to foster investment. Its functions are exercised principally by its operating bodies (the Accounting Standards Board, the Auditing Practices Board, the Board for Actuarial Standards, the Financial Reporting Review Panel, the Professional Oversight Board and the Accountancy and Actuarial Discipline Board) and by the FRC Board. The Committee on Corporate Governance assists the Board in its work on corporate governance.
2. The APB is committed to leading the development of auditing practice in the United Kingdom and the Republic of Ireland so as to:
   • establish high standards of auditing;
   • meet the developing needs of users of financial information; and
   • ensure public confidence in auditing.
3. The APB issues Practice Notes to assist auditors in applying auditing standards of general application to particular circumstances and industries. Practice Notes are persuasive rather than prescriptive. However, they are indicative of good practice.
4. On 29th June 2010 the FSA and FRC issued a joint Discussion Paper to stimulate debate and obtain views on ‘Enhancing the auditor’s contribution to prudential regulation.’ The comment period for that consultation ends on 29 September 2010. Given the relevance of this discussion paper to the audit of banks, the APB will also have regard to the responses to that consultation to consider whether there are matters that could helpfully be addressed in the guidance in Practice Note 19 when it is finalised.
5. Media enquiries should be directed to Marek Grabowski (Executive Director, APB) on 020 7492 2325, e-mail: m.grabowski@frc-apb.org.uk.