FRC’s Audit and Assurance Bulletin highlights the auditor’s responsibilities with respect to the Strategic Report and the Directors’ Remuneration Report
News types: Codes and Standards Announcements
Published: 10 April 2014
The FRC’s Bulletins provide auditors with guidance on new or emerging issues, they are persuasive rather than prescriptive, but are indicative of good practice.
The FRC plans to update ISA (UK and Ireland) 720 to take account of these new auditor responsibilities. The updates will be developed once the International Audit and Assurance Standards Board (IAASB) has finalised the revision of its equivalent standard. It will be consulting on this shortly.
Nick Land, FRC Board member and chair of the Audit and Assurance Council said:
“Recent developments in UK Company Law, the UK Listing Rules and the audit standards affect both the auditor’s duties and the wording of auditor’s reports on the financial statements of companies. The auditor is required to audit some but not all of the Directors’ Remuneration Report. It is particularly important, therefore, that the auditor should clearly describe within its report which elements of the Report that it has audited.”
The effects of the various developments, described in the Bulletin, on the auditor’s report of a company preparing accounts under the FRSSE and of a premium listed group are illustrated in two Appendices.
Notes to editors:
The FRC is responsible for promoting high quality corporate governance and reporting to foster investment. We set the UK Corporate Governance and Stewardship Codes as well as UK standards for accounting, auditing and actuarial work. We represent UK interests in international standard-setting. We also monitor and take action to promote the quality of corporate reporting and auditing. We operate independent disciplinary arrangements for accountants and actuaries; and oversee the regulatory activities of the accountancy and actuarial professional bodies.