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AUDIT

Project Scope

Accounting policies and effective Audit have long been an important part of any assessment of effective Governance. As part of its work, the Forum maintains open communications with the leading Audit firms and with the FRC and BEIS. Given the scrutiny which the industry is undergoing, the recent Brydon Review and the implications of COVID-19 we highlight below the Investor Forum’s insights.

This project aims to:

• Help Members prepare for the unusual audit reporting season that is to come, and make best use of auditor’s reports
• Provide evidence to help Members meet the demands of the Stewardship Code 2020
• Provide Members with insights into developments in the audit market, and which reforms will add most value for investors

Key Developments

The UK regulatory authorities, particularly the FCA, BEIS and FRC – and also Companies House – have mounted a coordinated effort to relax the corporate reporting timetables. Even with this increased flexibility, there are likely to be elements of audits that cannot be delivered effectively.

For investors, auditor reports and company discussions of going concern and viability should be more informative than usual, and are worthy of careful attention.

Some of the Brydon proposals around risk disclosure and resilience reporting seem particularly prescient in the current climate and may add real value for investors. With regulatory change nearing, investors may want to consider which new information and powers would be of most use to them.

Key activities

Investor Forum Briefing notes

The Forum has prepared a number of briefing notes which can be accessed via the links (above right) and which offer:

• Practical insights into the latest developments
• Likely impacts on reporting for investors
• Where investors can find more information about timetable changes

We have also hosted a number of Member events for Members details of which are available via the links (above right)

Additional Information

We have listed (here) the various announcements (and associated links) from UK regulatory authorities with implications for the timetables and substance of corporate reporting and audit.

Investors are likely to see more modified audit opinions, qualifications and disclaimers of opinion than usual. The FRC has produced a useful chart (here) which explains what each term means.

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