FRC publishes the results of its review of audit firms' going concern policies and procedures
08 Jul, 2020
The Financial Reporting Council (FRC) has published the results of its review of the seven largest UK audit firms' policies and procedures in relation to going concern, in light of COVID-19.
The FRC reviewed the seven largest UK audit firms' going concern policies and procedures in accordance with IAS (UK) 570.
The key findings of the review are:
- All firms enhanced their audit policies and procedures relating to going concern from the end of March 2020 for increased risk of material uncertainties of going concern due to COVID-19.
- Firms have focused on improving the consistency of execution in the audit of going concern through providing additional central support and oversight.
- The additional policies and procures implemented by the firms have been consistent with the requirements of ISA (UK) 570 and the additional guidance issued in March 2020 by the FRC.
- Additional policies and procedures have been similar across the firms.
The FRC's review followed guidance issued in March 2020 and a recent FRC Lab Report on going concern, risk and uncertainty.
In the next stage of the review, the FRC will review a sample of completed audits to assess how the revised going concern policies and procedures are being applied in practice and will report on this later this year.
Please click for the press release and review letter on the FRC website.
