The APB today issued International Standard on Auditing (UK and Ireland) (ISA (UK and Ireland)) 230 (Revised) 'Audit Documentation', which is effective for audits of financial information for periods beginning on or after 15 June 2006.

The revised APB standard adopts the text of the revised ISA 230 issued by the International Auditing and Assurance Standards Board (IAASB), which is effective from the same date.

To establish the level and completeness of documentation, the standard requires that the auditor prepare audit documentation sufficient to allow an experienced auditor, who has had no previous connection with the audit, to understand the audit work performed, the audit evidence obtained, the significant matters arising during the audit, and the conclusions reached.

The standard establishes clear responsibilities for the auditor to assemble the final audit file on a timely basis and sets out specific requirements regarding deletions, modifications or additions to audit documentation after the date of the auditor’s report.

There are also new documentation requirements in the exceptional circumstance when an auditor judges it necessary to depart from a basic principle or essential procedure that is relevant in the circumstances of the audit. The auditor should document how the alternative procedures performed achieve the objective of the audit and, unless otherwise clear, the reasons for the departure.

An attachment to the standard sets out conforming changes to:

• ISA (UK and Ireland) 200 “Objective and General Principles Governing and Audit of Financial Statements”;
• ISA (UK and Ireland) 330 “The auditor’s Procedures in Response to Assessed Risks”;
• ISQC (UK and Ireland) 1 “Quality Control for Firms That Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements”; and

APB Statement “The Auditing Practices Board – Scope and Authority of Pronouncements (Revised)”

Richard Fleck, Chairman of APB, commented:

“The new ISA (UK and Ireland) 230 reflects the finalisation of a revised international standard. The APB supports both the harmonisation of auditing standards on an international basis and the specific changes in ISA 230. It is particularly important for firms to note that any necessary changes to their systems of quality control required by the conforming changes to ISQC (UK and Ireland) 1 are required to be established by 15 June 2006.”

Copies of APB’s pronouncements, including ISA 230 (Revised), can be downloaded free of charge from the Publications section of the APB’s web site. Printed copies of ISA 230 (Revised), at a cost of £6.00 post free, can be obtained from:

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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 Accounting Standards Board, the Auditing Practices Board, the Financial Reporting Review Panel, the Accountancy Discipline and Investigation 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 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 the auditing process.
3. All press enquiries should be directed to: Jon Grant on Tel: 020 7492 2410.