FRC issues revised auditing standard and consults on guidance for quality bank audits
News types: Codes and Standards Announcements
Published: 12 December 2018
The Financial Reporting Council (FRC) has issued an International Standard on Auditing Accounting Estimates and Related Disclosures , covering the audit of expected credit losses in banks and which reflects the increased importance and complexity of estimates in financial statements. The FRC strongly supported the development on this standard.
The FRC is also consulting on updates to its Practice Note on The Audit of Banks and Building Societies in the United Kingdom, an area where the FRC has called for improved quality. The consultation reflects findings from the FRC’s audit inspection work covering bank audits, which were covered extensively in public reports in June 2018.
Mike Suffield, the FRC’s Acting Executive Director of Audit and Actuarial Regulation said:
“The UK strongly supports the development and adoption of high-quality global standards for corporate reporting and audit, enabling the UK to attract global investment. Changes to accounting standards have increased the significance of estimates in financial statements. The new standard provides a comprehensive, principles-based approach to delivering audits of estimates and related disclosures to a level that meets the needs of users and protects the public interest.”
The revised standard (ISA UK 540):
Early adoption of the new standard is permitted and is encouraged. It is effective for audits of financial statements for periods beginning on or after 15 December 2019.
Feedback Statement and Impact Assessment (PDF)
The consultation period on the Practice Note (PN 19) closes at 5pm on Friday 8 March 2019.