Welcome to Insights

April 2023 Newsletter

The monthly newsletter from the team at Insight Training

Each month we’ll bring you a short CPD training video, our blog, technical updates and FAQs from courses and reviews.

Supplier Quality Statement

Our Supplier Quality Statement can be viewed on our website or downloaded here to assist with your ISQM procedures.

London Marathon

On 23rd April, one of our directors, Nicky Clough, will be running the London Marathon to raise money for Dementia UK. Like so many, Nicky’s family has been affected by dementia, so this year Nicky is joining the Dementia UK team to raise awareness and support the funding of specialist Admiral nurses. If you would like to find out more, or support Nicky, please visit her fundraising page here.

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.

In this month’s vlog, Nicky Clough discusses the how, when and why of giving feedback.

James Charlton discusses the  upcoming challenges for group auditors in April’s blog.

Upcoming courses

Our full schedule of public CPD courses can be browsed in our 2023 brochure and our booking form is available to download.

Date – Time – Course – Presenter

18th Apr – 9.30-12.30 – Spring Audit Update – John Selwood

26th Apr – 9.30-12.30 – Tax Planning for 2023/Budget Update – Ros Martin

2nd May – 9.30-11.30 – How to Become an Effective Audit Junior – Richard Hemmings

2nd May – 12.30-1.30 – Going Concern – Richard Hemmings

3rd May – 9.30-12.30 – VAT – All the Bits you Used to Know – Dean Wootten

9th May – 9.30-12.30 – Spring Financial Reporting Update – Jez Williams

10th May – 9.30-12.30 – Accounting for Groups – James Charlton

16th May – 9.30-12.30 – General Practitioners’ Tax Workshop – Rebecca Benneyworth

23rd May – 9.30-12.30 – Accounting for and Auditing LLPs – Peter Herbert

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

Audit

Previously I was told that if a risk is significant then you have to do substantive tests of detail, but if it isn’t, substantive analytical review is sufficient. Is this true?

This is true. Paragraph 21 of ISA (UK) 330 states that ‘when the approach to a significant risk consists only of substantive procedures, those procedures shall include tests of details’. This might sometimes feels quite onerous. If the auditor has planned an analytical review test which is ‘predictive’ in its nature (a requirement of ISA (UK) 520), and it works precisely, why would any more audit evidence be needed? However, the requirement in ISA 330 is very clear. The revisions to ISA (UK) 315 on risk assessment, effective for periods commencing 15  December 2021, are making auditors think very hard about which risks are significant – and which risks aren’t.

Financial Reporting

We’ve just started to act for a client with a very valuable property. On the advice of the previous accountant the buildings have been heavily depreciated but this feels wrong. What should we advise?

Under FRS 102, residual value is defined as the estimated amount that an entity would currently obtain from disposal of an asset, after deducting the estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life. This gives accounts preparers more grounds to not depreciate tangible assets than was the case under old UK GAAP.

If the previous accountant hasn’t grasped this and the property has a residual value higher than the current net book value, the client would be best advised not to depreciate the asset going forward. However, there is no scope under UK GAAP to reverse previously over-charged depreciation.

Charities

We prepare receipts and payments accounts from client records. Can we act as Independent Examiners as well? Is any disclosure needed?

This should be ok. The Charity Commission directions on independent examination (CC32) state that “whilst the charity trustees are responsible for the preparation of accounts, on occasion the examiner may also prepare the statutory accounts on behalf of the trustees”.

This should not compromise the examiner’s independence provided that the examiner ensures that the requirements of the directions are met, the accounting records have been maintained by another person, the examiner has had no direct involvement in the day-to-day management or administration of the charity and the trustees review and approve those accounts.

Assuming that this has all happened, the firm can act as examiner and no specific disclosure is required.

In a recent poll

Do average employee numbers generally include directors without a formal service contract?
April 2023 pie - Insight Training

This is always a contentious question. We don’t feel that a formal service contract is required in order for someone to be classified as an ‘employee’ for financial reporting purposes, though clearly the majority of respondents here do. The most important thing is whether they are working within the organisation day to day. A better rule of thumb might be whether they are getting remunerated through the payroll.