FRC issues Bulletin: Guidance for auditors and matters to consider where engagements are affected by coronavirus (COVID-19)
The Financial Reporting Council (FRC) has issued a bulletin for auditors on 26 March 2020, Guidance for auditors and matters to consider where engagements are affected by coronavirus (COVID-19).
The FRC highlights that the bulletin is intended to provide guidance to auditors, carrying out audit engagements that may be affected by COVID-19 and is driven by two factors:
(i)In order to be able to give an audit opinion that is not subject to a disclaimer or qualification due to a scope limitation, the auditor must always obtain sufficient, appropriate audit evidence; and
(ii)Even in challenging times, the flow of high quality, independently assured information to support the functioning of capital markets is of fundamental importance. Reporting on audit engagements should be driven by the information needs of users of audited financial statements.
The bulletin is intended to help auditors deal with the emerging situation and should not be considered to be enduring or long-term solutions. The FRC will withdraw this bulletin when circumstances return to normal. It details a non-exhaustive list of factors auditors should be considering when carrying out audit engagements in the current circumstances, along with guidance on how they might be addressed.
The guidance covers the following areas:
- Acceptance and take-on of new audit engagement
- Planned Audit Approach
- Materiality
- Communication with Those Charged with Governance
- Audit Evidence, including Audit Confirmations
- Compliance with Laws and Regulations
- Going Concern
- Group Audits
- Access to Information
- Quality control
- Reporting – Key Audit Matters (when ISA (UK) 701 applies)
- Reporting – Scoping
- Reporting – Modified Opinions
- Subsequent Events
- Written Representations
- Professional Scepticism
- Partner Rotation
- Support to Audited Entities
Further information is provided in the FRC Bulletin.
ICAS members with queries on any technical matter relating to the current situation are advised to submit these as normal via the online portal at icas.com. If it is then deemed necessary, this might lead to a telephone discussion at a mutually convenient time with an appropriate member of the ICAS team.
