Welcome back!
Welcome back to our newsletter, after a short break over the summer. After a few weeks of less training and more file reviews whilst people were away, we’re back into full swing this month with lots of in house and public courses coming up. Our CPD programme restarts this month with our Autumn Tax Update on 27th September.
We’re recruiting
We’re very excited to be recruiting a full or part time technical trainer and audit file reviewer to our team. Please get in touch if you know of anyone who might be interested. Click here for the job spec.
Upcoming courses
Our full schedule of public CPD courses can be browsed in our 2023 brochure and our booking form is available to download. Our 2024 programme is coming soon!
Date – Time – Course – Presenter
27th Sept – 9.30 – 12.30 – Autumn Tax Update – Malcolm Greenbaum
3rd Oct – 9.30-11.30 – How to Audit a Charity – Richard Hemmings
3rd Oct – 12.30-1.30 – Analytical Review – Richard Hemmings
4th Oct – 9.30-11.00 – IFRS Update – Clare Jones
9th Oct – 9.30-12.30 – Autumn Financial Reporting Update – John Selwood
10th Oct – 9.30-11.30 – How to Become an Effective Audit Senior – Clare Jones
10th Oct – 12.30-1.30 – Auditing Stock – Clare Jones
12th Oct – 9.30-12.30 – Top Tips for an Efficient Audit – Richard Hemmings
17th Oct – 9.30-12.30 – Tax Issues of Buying and Selling Businesses – Ros Martin
18th Oct – 9.30-12.30 – Practice Regulation Update – Edward Rands
Our 2023 AML E-Learning Programme is available to buy now.
“Excellent delivery, easily understood with some good points raised.” Delegate, Autumn series
FAQs from recent courses
Auditing – Academies
Does the current Reinforced Autoclaved Aerated Concrete (RAAC) issue need to concern us when performing academy trust audits this Autumn?
Definitely! The first step should be to check whether trusts you act for have schools on the government’s list of affected schools. The list can be accessed here. Even if they don’t, it’s still worth talking to clients to understand whether there might still be an issue. There are three important implications for the annual report and accounts:
· The Trustees’ Annual Report needs to give adequate consideration to school buildings’ safety risks and how these are addressed, a point specifically mentioned in this year’s Academies Accounts Direction.
· For schools affected there will be impairment adjustments to make based on the requirements of SORP paragraph 12.18.
· It will also be important to consider whether provision will need to be made for the costs of making good, based on the requirements of section 21 of FRS 102. Any DfE support in covering these costs can only be anticipated in the financial statements where its crystallisation is virtually certain, which is not likely to be the case at the current time.
The ESFA may also issue guidance for 31 August 2023 year ends in the weeks to come, so keep an eye on their weekly bulletin here.
Financial Reporting – IFRS
We have a client which is looking to transition to IFRS. What are the key differences compared to UK GAAP, as we have no prior experience?
There are lots of subtle but important differences between UK GAAP and IFRS, which means that this client’s decision may not be great news for the firm concerned! However, at a high level, the rules are reasonably similar. There are three principal differences:
· Under UK GAAP goodwill is systematically amortised over its estimated useful life, whereas under IFRS it is reviewed annually for impairment.
· The operating lease v finance distinction for lessees doesn’t exist under IFRS. With some exceptions all lease obligations are on balance sheet, with a corresponding right of use asset.
· When accounting for investment properties under IFRS, an accounting policy choice exists (depreciated historic cost or fair value through P&L). Under FRS 102, fair value through P&L is mandatory. Under FRS 105, depreciated historic cost is mandatory.
Join Clare Jones for our IFRS Update on 4th October.
Interpersonal
An audit firm is trialing a new initiative for partners using psychometric assessment tools to help partners identify how their personality may be conducive to, or inhibit, audit quality. How might this help?
It’s all about the soft skills! Psychometric instruments are a fantastic tool that can help individuals understand personality preferences and that what works for one person, may not work for another. The FRC reports that Audit firms may have different subcultures reflecting the different leadership styles of partners (their paper can be found here).
For example, how individuals react to and deal with conflict and challenge varies. The audit partner may find it easy to challenge and have robust conversations and this might be modelled to the rest of the team. But are more junior members as comfortable to challenge and speak up or might their personality preference be to avoid conflict. They may need to be actively encouraged and prompted to speak up. Does the audit partner realise this and allow the time to ask and listen to other views.
An awareness of your personality style, and how it may differ from other team members can really help you to understand how you impact on others and what you might need to flex to create the right culture to foster healthy scepticism.
In a recent poll
What has prompted root cause analysis (RCA) in your firm?
We posed this question on our recent ISQM 1 seminar and were encouraged that lots of respondents had embraced RCA, albeit that they had been prompted to do it, either by a cold file reviewer or a professional body. RCA involves drilling down to really understand why issues arise on file reviews – and then putting a plan in place to fix them. We always advise firms to be focused when performing RCA rather than trying to fix everything in one go. Address issues that your review has raised as ‘key’(and if the reviewer has not said what’s key, ask them) and also look at systemic issues that are cropping up on a number of different files.
