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FRC consults on revised guidance for auditors of UK insurers

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02 Nov 2016

The Financial Reporting Council (FRC) has published a consultation on revisions to Practice Note 20: The Audit of Insurers in the UK (PN20). The consultation also proposes the withdrawal of Practice Note 24: The Audit of Friendly Societies in the United Kingdom (PN24).

PN20 provides guidance on the application of auditing standards to audits of statutory financial statements in the insurance sector and was last updated in 2011. The revisions proposed in the consultation are to reflect significant changes to the regulatory environment, including the Solvency II prudential regulation regime, in addition to 2016 revisions to UK auditing standards. The consultation has been launched alongside the adoption in the UK of two international auditing standards, ISAs 800 and 805, which are relevant to the opinions that auditors must now give in respect of Solvency II public disclosures.

The FRC also proposes to withdraw PN24 as a significant proportion of the material contained in the practice note was identical to that contained in PN20. The FRC has now incorporated material specific to the audit of friendly societies into the new version of PN20 and therefore proposes to withdraw PN24.

The FRC is seeking views on whether stakeholders believe the revised guidance is fit for purpose, and provides the necessary support to auditors in the insurance sector. The consultation period is open until 5pm on 16 December 2016.

Click here to access the FRC Consultation Paper (link to FRC website).

Click here to access the FRC Exposure Draft of the revised P20 (link to FRC website).

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