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NAO publishes Code of Audit Practice for the audit of local public bodies

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24 Mar 2015

The National Audit Office (NAO) has published the Code of Audit Practice for the audit of local public bodies (“the Code”). The Code will take effect from 1 April 2015 and applies for audits relating to financial year 2015-16 and beyond. Parliament has approved the Code.

Following the introduction of the Local Audit and Accountability Act 2014 (“the Act”) in January 2014, the Comptroller and Auditor General (CAG, the head of the NAO) will take on the role of preparing and maintaining the Code from the Audit Commission, which is to be abolished on 31 March 2015.

The Code sets out what local auditors of relevant local public bodies (as defined in Schedule 2 of the Act) are required to do to fulfil their statutory responsibilities under the Act. 

The CAG has put together a single unified code covering the audit of all different types of local public body.  The Code is a principles rather than a rules based framework.

In the preface to the Code the NAO comments:

We have taken a principles-based, rather than a rules-based, approach to developing the Code. This is in line with predecessor codes and has allowed us to prepare a concise, high-level code applicable to the audit of all local public bodies within the local audit model established by the Act, providing a clear framework for the auditor to meet their statutory duties. A principles-based approach also helps to ensure that the Code does not quickly become out of date as the regulatory environment evolves.

In addition to Code, the NAO has also published a series of Auditor Guidance Notes to auditors “to support auditors in their work and facilitate consistency of approach between auditors of the same types of entity”.  The Act requires auditors to have regard to such guidance.

The NAO have confirmed that existing codes and guidance prepared by the Audit Commission for local government and local NHS bodies and Monitor’s Audit Code for NHS foundation trusts will continue to apply for audits relating to 2014-15.

The NAO press release, Code of Audit Practice and supporting Auditor Guidance Notes are available on the NAO website. 

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