FRC publishes an Audit Quality Thematic Review

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10 Dec, 2018

The Financial Reporting Council (FRC) has published the results of its '2018 Audit Quality Thematic Review on Other Information in the Financial Report'.

The review of six audit firms focused on the auditor’s work in respect of other information in the financial report. ’Other information’ is all financial and non-financial information included in an entity’s report other than the financial statements and audited parts of the directors’ remuneration report.

Investors and other stakeholders use a wide variety of financial and non-financial information to assess the performance of the company, which comes from a variety of sources in addition to the audited financial statements.

The auditor's opinion on the financial statement does not cover this other information. Instead, as part of an audit of the financial statements, the auditor is required to consider whether the other information is materially inconsistent with the audited financial statements or the auditor's knowledge and report on this in the auditor's report. Auditing standards are not prescriptive around what procedures auditors are required to do.

The report identifies areas of better practice as well as some areas for development for audit firms.  Additionally, the FRC has suggested areas of improvement for Audit Committees in relation to other information.

The press release and full report are available on the FRC website.

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