On 25 November 2005 the Audting Practices Board (“APB”) issued Bulletins 2005/3 “Guidance for Auditors on First-time Application of IFRSs in the United Kingdom and the Republic of Ireland” and 2005/4 “Auditor’s Reports on Financial Statements in Great Britain and Northern Ireland”.

In those Bulletins the APB refers to the consensus reached by the European Federation of Accountants (FEE) regarding a standard reference for compliance with IFRSs in the European Union. FEE recommended that the following reference be used “…in accordance with IFRSs as adopted for use in the EU”. This reference was used in the illustrative auditor’s reports set out in Bulletin 2005/4 and the illustrative review report set out in Bulletin 2005/3.

After the Bulletins were published the Accounting Regulatory Committee (ARC) of the European Commission indicated that it was supportive of the following standard formulation for use in the notes to the accounts and in the auditor’s report.

“…in accordance with International Financial Reporting Standards as adopted by the EU” or (abbreviated version) “in accordance with IFRSs as adopted by the EU”.

The ARC’s formulation differs slightly from that recommended by FEE. The EC’s reason for using a different reference is that the expression “for use in the EU” may be regarded as restrictive because it gives an impression that the endorsed version of the IFRSs would be only for use within the EU whereas EU issuers may use endorsed IFRSs on certain third-country markets.

The purpose of this Press Release is to draw attention to the formulation used by the EC so that auditors have the opportunity to use the revised standard reference in their reports. The APB does not regard the difference between the two references as being sufficiently substantive to warrant revising Bulletin 2005/3 and 2005/4 at this time. However, the EC wording will be added as an alternative by means of a footnote within the electronic versions of these Bulletins.

1. The Financial Reporting Council (“FRC”) is a unified, independent regulator. Its mission is to promote confidence in corporate reporting and governance. The FRC incorporates five operating bodies, the APB, the Accounting Standards Board, The Financial Reporting Review Panel, the Accountancy Investigation and Discipline Board and the Professional Oversight Board for Accountancy.
2. The APB is committed to leading the development of auditing practice in the United Kingdom and Republic of Ireland so as to:

   • establish high standards of auditing;
   • meet the developing needs of users of financial statements; and
   • ensure public confidence in the auditing process.
3. The APB issues Bulletins to provide auditors with timely guidance on new and emerging issues. They are persuasive rather than prescriptive. However, they are indicative of good practice even though they may be developed without the full process of consultation and exposure used for Auditing Standards.
4. All press enquiries should be directed to: APB Executive Director, Jon Grant on Tel: 020 7492-2410.