In this month’s vlog, Peter Herbert discusses current issues for Academy and Further/Higher Education College audits.
We are very excited to announce that Maya Norbury will be joining us as a trainer and audit file reviewer from October. Maya joins us from a Manchester based practice. She is a financial reporting and auditing expert with a particular interest in not for profit organisations and pension schemes. In her current role, Maya has loved taking part in internal technical training projects, improving audit quality and strengthening technical knowledge, and feels that joining Insight Training is the perfect next step.
Upcoming courses
Our 2024 CPD programme is now live and open for bookings. Click to download our brochure and booking form.
Date – Time – Course – Presenter
27th Sept – 9.30-12.30 – Introduction to Audit part 1 – James Charlton
1st Oct – 9.30-12.30 – Practice Assurance Update – John Selwood
2nd Oct – 9.30-11.30 – IFRS Comprehensive Refresher – Clare Jones
2nd Oct – 11.45-12.45 – IFRS Update – Clare Jones
3rd Oct – 9.30-11.30 – How to Close Down an Audit – Richard Hemmings
8th Oct – 9.30-12.30 – Introduction to Audit part 2 – James Charlton
10th Oct – 9.30-12.30 – Autumn Tax Update – Rebecca Benneyworth
14th Oct – 9.30-12.30 – Autumn Financial Reporting Update – John Selwood
16th Oct – 9.30-11.30 – Ethics for Accountants and Auditors – Peter Herbert
Our new AML, Ethics and GDPR E-Learning Programmes are available now.
“Excellent delivery, easily understood with some good points raised.” Delegate, Autumn series
FAQs from recent courses
Charities
We act for a Charitable Cooperative and Community Benefit Society. Is the Charity SORP compliance mandatory?
We feel that the answer here is yes. SORP paragraph 14 states that ‘except where an alternative reporting framework sets out in legislation or regulation, or if another SORP applies, the accounting recommendations of this SORP apply to all charities in the UK that prepare accounts on the accruals basis to give a true and fair view of a charity’s financial position and financial activities regardless of their size, constitution or complexity’.
Some CCBSs don’t apply the SORP though – and it has been pointed out to us that guidance in Charity Commission publication CC23 (‘Exempt Charities’) slightly contradicts the SORP. We have escalated this with ICAEW and the Charity Commission and will report back in due course.
Audit
What is changing regarding fee dependence in the revised Ethical Standard and from when?
The FRC Ethical Standard for Auditors states that ‘where total fees for services receivable from a non-listed entity or a collection of entities with the same beneficial owner or controlling party relevant to a recurring engagement by the firm will regularly exceed 15% of the annual fee income of the firm, the firm shall not act as the provider of the engagement for that entity…’. This is all assuming that the entity is not a public interest entity (or PIE). Where the 15% threshold is not breached, but a 10% threshold is breached, appropriate safeguards (such a hot file review) will be needed.
The key change here is highlighted above and will mean that some firms will breach the threshold in a way they haven’t before and will therefore need to disengage. This new rule applies to audits for periods commencing on or after 15 December 2024. There is a dispensation in paragraph 1.74 of the standard which might help, but this only applies to new firms.
Skills
SMART goals – is it still a ‘relevant’ acronym in 2024?
Mention ‘SMART’ on a skills programme and eyes may roll and be received with a general feeling of ‘Yes, yes we know … Specific, Measurable, Achievable, Realistic, Timebound … heard it all before’. And it’s true, SMART has been used for ever and can feel outdated. But it’s often not used well.
When things go wrong, work is not completed on time, or not to the required standard, it can often be traced back to a failure of briefing. Expectations haven’t been set, understanding hasn’t been checked, and opportunities to motivate missed.
Much of this can be avoided if SMART is used as a guide to the conversation (not just a tell) and RELEVANT is substituted for realistic. The younger generations in the workplace (the Gen Z’ders) look for meaning in their work. How is the goal relevant to them, how will it help them to develop and learn and how are they contributing to the work of the firm?
It may be an old chestnut … but it’s still around for a reason and, yes, very much still relevant!
In a recent poll
Are the existing rules in respect of income recognition in FRS 102 sufficient?
The implementation of FRS 102 and FRS 105 revisions with effect from periods commencing 1 January 2026 will require all entities (even those that are micro-sized) to have a fresh look at income recognition and give careful thought to the need for change. It is anticipated that for many companies the approach will not change in the light of the revisions, so are changes really needed? As you can see from this poll, the views of many attending our courses are somewhat split. We feel that the current rules in section 23 of FRS 102 (section 18 of FRS 105) are flawed and that it is time for a rethink!
