The Financial Reporting Council (FRC) has revised a number of auditing standards that will increase the scope of the work that all auditors are required to perform. Due to the significance of these changes you are likely to notice some changes to your next year end audit. The first set of financial statements that will be impacted for most Credit Unions will be those to 30 September 2021. Its important to be aware of these changes as some will impact the information that your auditor will require for the financial statements.
Many Credit Unions only prepare a budgets/projections covering the next financial year. Under the new standards auditors will require, as part of their audit work. to obtain budgets/projections covering 12 months from the date of signing the audit report. So if your projections only cover to the end of the following financial year then you will probably find your auditor requiring further information.
Increased level of Audit Work
The new standards require greater levels of structured evaluation, consideration and documentation in the areas of going concern and accounting estimates. Even where the auditor was already carrying out this work there will be a considerable rise in the level of documentation required in these areas.
The audit report will also change under the new standards. Auditors are now required to state the extent to which the audit was considered capable of detecting irregularities, including fraud and how the auditor approached this. So expect at least another page to the ever increasing length of financial statemen