Financial Reporting Council Releases Consultation on Financial Instruments Auditing

The Financial Reporting Council has released a consultation paper with regard to updating the guide to the auditors pertaining to auditing of finance related instruments (updating Revised Practice Note 23), which has been recently proposed.

The update shows both the International Standards on Auditing (Ireland as well as United Kingdom) and also updated the guide issued by the IAASB in its International Auditing Practice Note 1000, Special Considerations in Auditing Financial Instruments.

The Financial Reporting Council has also supplemented IAPN 1000 with a guide, which at present has been included in the revised Practice Note 23 and is considered to be relevant and comes with a slightly new guide with regard to matters that have not been covered in the Practice Note 23 or IAPN 1000.

Nick Land, (Chairman, Audit and Assurance Council and the Financial Reporting Council), stated that the updated guide that has been proposed should be appropriate to the audits of companies of all scales and sizes, which may be based on the risks that are related to utilizing finance related instruments. The guide shows the lessons that have been learnt during the economic downturn. The Financial Reporting Council has invited comments from other stakeholders and auditors who are interested in auditing. The last date for receiving the comments is 4^th January 2013.

The FRC is the United Kingdom’s independent regulatory body that is responsible for the promotion of superior quality reporting and corporate governance that can further help in fostering investment. The Financial Reporting Council also promotes high level of corporate governance via the United Kingdom Corporate Governance Code. The board is also responsible for setting standards for corporate related reporting as well as actuarial practice and for monitoring and enforcing auditing and accounting standards. The board also keeps an eye on the regulation related activities of the profession of actuarial as well as accountancy organizations and operates independent discipline related arrangements for the cases that are related to actuaries and accountants. The Financial Reporting Council is aided by 3 committees including the Conduct Committee, the Executive Committee and the Codes and Standards Committee.