The Financial Reporting Council issued on 28 September 2012 revised auditing standards which aim “to enhance communications to audit committees and auditor reporting”. From the FRC press release:
“The revised standards are effective for audits of financial statements for periods commencing on or after 1 October 2012.
The revisions primarily give effect to proposals in Effective Company Stewardship: Next Steps published by the FRC in September 2011 and support changes to the UK Corporate Governance Code and Guidance for Audit Committees that have also been issued by the FRC today. The changes in the standards are mainly directed at:
Enhancing auditor communications by requiring the auditor to communicate to the audit committee information that the auditor believes the audit committee will need to understand the significant professional judgments made in the audit;
Extending auditor reporting by requiring the auditor to report, by exception, if the board’s statement that the annual report is fair, balanced and understandable is inconsistent with the knowledge acquired by the auditor in the course of performing the audit, or if the matters disclosed in the report from the audit committee do not appropriately address matters communicated by the auditor to the committee.”
The revised auditing standards can be read here.
See also: UK Corporate Governance and Stewardship Codes: FRC confirms changes - 28 September 2012
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