FRC and BEIS publish ‘no deal’ Brexit accounting and audit letters

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22 Feb, 2019

The Financial Reporting Council (FRC) and the Department for Business, Energy and Industrial Strategy (BEIS) have published letters for auditors and accountants to share information in case there is no deal for leaving the EU by 29 March 2019.

The accounting letter explains how new legislation will affect the accounting and corporate reporting regime in the UK in the event of ‘no deal’. In particular, UK incorporated companies will be required to use “UK-adopted IAS” for financial years beginning after the date of UK’s exit from the EU, and certain preparation, filing and audit exemptions will also change.   The letter will be particularly relevant for UK and EEA listed companies, AIM companies, large privately-owned entities and Global Depository Receipt (GDR) issuers.

The audit letter sets out key actions in relation to the future of audit regulation that auditors and audit firms will need to take in preparation for a ‘no deal’ Brexit.  It specifically relates to the registration and recognition of UK and EEA auditors and to ongoing UK audits but also covers group audits and firm ownership.  The letter will be relevant to auditors and firms.

Both letters include a number of frequently asked questions to assist businesses with their preparations.

Alongside the letters, the FRC has published guidance on third country auditors and the future endorsement of IFRSs.

Please click to access the letters and supporting materials on the FRC website. Our previous news item on the new legislation is available here.

Our related Need to know publication if available here.

UPDATE 24 MAY 2019 - BEIS have issued guidance on accounting if there is a no deal Brexit which is available here.  Additionally guidance issued by BEIS on auditing if there is a no deal Brexit is available here.  This guidance is substantively the same as the guidance in the letters as mentioned above.

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