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FRC and BEIS publish revised Brexit accounting and audit letters

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  • BEIS Image

14 Feb 2020

The Financial Reporting Council (FRC) and the Department for Business, Energy and Industrial Strategy (BEIS) have jointly published revised letters for auditors and accountants with information regarding auditing, accounting and corporate reporting standards during the transition period following the UK’s exit from the EU on 31 January 2020.

The letters explain that during the transition period there will be no changes to the UK’s auditing, accounting and corporate reporting frameworks. The letters explain that now the UK has left the European Union with the Withdrawal Agreement, the guidance and correspondence that was previously issued about the effects of a ‘No Deal’ are no longer relevant.

In 2019 the government approved a number of statutory instruments for the audit and accounting sectors; these will come into force at the end of the transition period - 31 December 2020 - with most changes taking effect for periods beginning after that date.

The accounting letter explains how the accounting and corporate reporting regime in the UK will change following the end of the transition period. In particular, UK incorporated companies will be required to use “UK-adopted IAS” for financial years beginning after the end of the transition period, 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 changes to the future of audit regulation following the end of the transition period. 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.

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

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