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Revisions to International Standards on Auditing (UK)
The Financial Reporting Council (FRC) recently issued a revision of ISA (UK) 250 Section A – Consideration of laws and regulations in an audit of financial statements, and conforming amendments to other ISAs (UK), effective for audits of financial statements for periods commencing on or after 15 December 2017.
The revisions, which are limited in scope, reflect changes made to the International Code of Ethics1 issued by the International Ethics Standards Board for Accountants (IESBA). These changes provide a framework to support reporting by accountants where they identify non-compliance with laws or regulations in the course of their work. The International Auditing and Assurance Standards Board (IAASB) made minor changes to align ISA 250 with the requirements of the revised Code.
The changes help to improve the clarity of the ISA (UK), for example, the definition of non-compliance has been amended to cover a broader range of instances that are contrary to the prevailing laws or regulations. This is supported by application material on laws and regulations that deal with fraud, corruption and bribery and money laundering, terrorist financing and proceeds of crime.
The FRC has also issued revised ISA (UK) 330 The Auditor’s Responses to Assessed Risks, with conforming amendments to ISA (UK) 505 External Confirmations, also effective for audits of financial statements for periods commencing on or after 15 December 2017. The revisions have the effect of streamlining and integrating the guidance relating to obtaining bank reports for audit purposes into the auditing standards. Consequently, the FRC has withdrawn Practice Note 16 Bank reports for audit purposes in the United Kingdom from the date the revised standard is effective from. The templates for requesting bank reports will remain available for use on the British Bankers’ Association website (now UK Finance), where an auditor wishes to obtain such a report.
1 Auditors in the UK must comply with the FRC Ethical Standard. Professional accountants in the UK use the Code of Ethics adopted and issued by their respective professional body, which complies with the requirements of the IESBA Code.
Related Resources
Revised standards
ISA (UK) 250 Revised July 2017
ISA (UK) 330 Revised July 2017
Standards with conforming amendments
ISQC (UK) 1 Revised June 2016
ISA (UK) 210 Revised June 2016
ISA (UK) 220 Revised June 2016
ISA (UK) 240 Revised June 2016
ISA (UK) 260 Revised June 2016
ISA (UK) 450 Revised June 2016
ISA (UK) 500
ISA (UK) 505
Feedback statement and impact assessment
Feedback Statement and Impact Assessment: ISA (UK) 250 (Revised July 2016) Section A
Feedback Statement and Impact Assessment: Withdrawal of Practice Note 16
