Each month we’ll bring you a short CPD training video, our blog, technical updates and FAQs from courses and reviews.
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.
New website
While you’re here, why not browse our new website?
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
28th Mar – 9.30-12.30 – ISA 315 + 240 – Practical Implication Challenges – Peter Herbert
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
Where there is material uncertainty about going concern, reference to it is required in the audit report but where there is some uncertainty about going concern no such reference is needed. How do you define the difference?
This is a really tricky issue, not helped by the fact that FRS 102 doesn’t define material uncertainty very well. For there to be material uncertainty things need to be pretty serious – that overdraft renewal genuinely might not happen; that crucial parental support might be unlikely to materialise; there might be a real chance that the all-important charity grant funding might fall off the edge of a cliff. It’s a tough one for auditors though. If they propose to reference to the uncertainty in their audit report they can expect major client resistance.
Charities – Financial Reporting
A new charity client has classified a fund as restricted but we disagree. Is it possible to reclassify if the trustees now look back and determine that previous donations weren’t actually restricted?
Yes, it is – though if it’s simply a question of them having got it wrong in the past, the reclassification will need to be effected – and explained in the notes to the accounts – as a prior period adjustment. This is a common problem with charities in our experience. Some wrongly think that just because donations are to be used to advance the charity’s broad objectives they should be classified as restricted funds.
Interpersonal
Why is it that change can be so difficult to deal with?
Most people experience change as pain. We are evolutionarily wired to attend to changes in our environment as threats, prompting our ‘Fight, Flight or Freeze’ instinct to kick in. So, our first response is often to resist, panic or stall. That first response, and how long it lasts, is often informed by past experiences, whether a previous change has had a positive impact or if it ended up being an unhappy experience. Firms are dealing with change all the time whether that’s implementing new policies, new procedures, new software, or different working practices. When implementing change it’s important to understand that people’s first response can be negative or cautious. Expect this and be patient – in time, most people will embrace or at least adapt to the change proposed.
Financial Reporting
A client booked a large fixed asset impairment writedown last year which it now wants to reverse due to a change in strategy. Is that acceptable?
Yes, it is, though the following criteria are very important:
· The reversal cannot relate to goodwill;
· The reasons for the impairment loss must have ceased to apply, which means that the client must be committed to the change in strategy at the year-end; and
· The reversal of the impairment loss must not increase the carrying amount of the asset above the carrying amount that would have been determined had no such loss been recognised for the asset in prior years.
If it’s an audit, detailed testing will also, of course, need to be performed to validate the approach and the amount of the impairment loss writeback.
In a recent poll
Does bringing all leases on balance sheet feel like a good idea?
This was a poll used on a recent financial reporting course. The response speaks for itself! Many practitioners aren’t hugely excited about FRED 82’s suggestion that operating leases come on balance sheet for lessees. The good news for them is that if it does happen (and it probably will!) the change to the rules won’t take effect until periods commencing 1 January 2025 and certain low value leases will be exempt.
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