Welcome to Insights

January 2025 Insights Newsletter

The monthly newsletter from the team at Insight Training

In this month’s vlog, Maya Norbury discusses upcoming changes to the charities SORP.

Peter Herbert gives his top tips for 2025 audits in this ICAEW Audit faculty blog.  (Contact us for a copy if not a member.)

Upcoming courses

Our 2025 CPD programme is open for bookings on our website.

You can download our booking form and brochure here

Date – Time – Course – Presenter

4th Mar – 9.30-12.30 – Charity Accounts and Audit The Fundamentals – Richard Hemmings

7th Mar – 9.30-12.30 – Charities Update – Peter Herbert & Maya Norbury

10th Mar – 9.30-12.30 – Audit Testing of Systems and Controls – Peter Herbert

14th Mar – 9.30-12.30 – Spring Tax Update – Malcolm Greenbaum

18th Mar – 1.00-2.00 – Effective Communication and Influencing Others – Nicky Clough

19th Mar – 9.30-12.30 – Payroll Update – Rebecca Benneyworth

25th Mar – 9.30-11.30 – Independent Examination of Charities – James Chalrton

25th Mar – 12.30-1.30 – IT Controls Under ISA 315 – James Charlton

Our AML, Ethics and GDPR E-Learning Programmes are available now. New versions will be available in February 2025.

“Excellent delivery, easily understood with some good points raised. Delegate, Autumn series

FAQs from recent courses

Audit

Can you use a mix of sampling approaches across an audit file?

There are two commonly used standard sampling methodologies in the UK. One divides the population value by tolerable error and then applies a sampling risk factor, which takes into account misstatement risk and other audit testing performed. The other methodology starts from a sample size of 60 and then allows deductions based on risk, materiality and other audit testing performed. The first approach works well for smaller populations; the second works better for larger populations. Though many firms will use one or other of these approaches, it is possible to use both. The key requirement is to clearly document your sampling approach on file – and to be VERY clear when you are applying judgement to deviate from it, which can happen.

Practice Assurance

Do engagement letters need to be updated periodically?

There is no formal requirement to update letters of engagement regularly unless the circumstances of an engagement change. We would certainly encourage firms to review their letters regularly in order to identify any need for an update. One aspect to look out for is where the scope of an engagement changes without the firm really realising it’s happened. This is often called ‘scope creep.’ Firms should ask themselves whether they’ve comfortable with the scope creep, whether they are appropriately charging for any additional services – and whether the related professional risk is appropriately dealt with in the letter of engagement.

Interpersonal skills

Are you listening to me?

Good communication isn’t just about speaking.  Listening to the other person is just as important.  Did you know that there are three levels of listening:

  • Level One – Internal Listening – the focus is on yourself.  You listen in order to respond, sometimes this appears as though you are just waiting for your turn to speak.
  • Level Two – Focussed Listening – the focus is on the other person.  Here you are actively listening to understand the other person.  This is very powerful, as long as the other person is aware that you have heard and understood them.
  • Level Three – Global Listening – the focus here is on the full context of the situation.  We’re listening to learn. 

How often do you listen at level three?

Financial Reporting

We act for a company charity with £2M of income which we have audited under the Companies Act. Companies House have rejected the accounts because they don’t include a balance sheet statement stating the charity is audit exempt. Is this right?

In a word ‘no’, though this is an issue we’re aware of. Where charity law requires an audit and this is carried out under the Charities Act for a charitable company, a balance sheet statement making clear that the charity is audit exempt under the Companies Act is required. However, when the audit is performed under the Companies Act instead, then no such statement is required. When this situation cropped up recently for one of our clients, we encouraged them to challenge Companies House accordingly. ICAEW has produced a useful helpsheet on this matter which members can download here.