FRC update on auditors’ legal responsibilities

The Financial Reporting Council (FRC) has issued a revision to ISA (UK) 250 Section A – consideration of laws and regulations in an audit of financial statements, which includes updated guidance on the auditor's responsibilities in respect of money laundering, terrorist financing and proceeds of crime legislation in the UK

The guidance was revised following consultation with the Treasury, HMRC and the National Crime Agency (NCA). The new ISA (UK) is effective for audits of financial statements for periods commencing on or after 15 December 2017.

The regulator said it has incorporated the guidance as an appendix to the ISA, to make all relevant material to support auditors available in one place.

The FRC stated: ‘The intention is that auditors have available within the standard high level, principles-based guidance, which is supported by the more detailed material in the Consultative Committee of Accountancy Bodies (CCAB) revised guidance.

‘So as to future proof the standard we have: removed detailed legislative references and replaced them with links to the relevant legislative material; provided links to NCA and CCAB material providing additional guidance; and removed detailed examples to reflect the fact that standards are principles-based and to not contain exhaustive examples.’

This appendix supersedes the guidance included in practice note 12 Money Laundering––Guidance For Auditors On UK Legislation and consequently this practice note is withdrawn.

International Standard on Auditing (UK) 250 (Revised) Section A––Consideration of Laws and Regulations in an Audit of Financial Statements is here.

Report by Pat Sweet

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