Newswire October 2019

  • By Mercia Group
  • 31 October 2019 00:00

Following the cancellation of the Budget on 6 November 2019 and the announcement of a December General Election the parliamentary timing of the Budget and subsequent Finance Bill remains uncertain. We will be sure to keep you updated on any developments.

Meanwhile, Brexit is still a major topic of conversation and conjecture after the EU agreed to extend the deadline for the UK's departure until 31 January 2020. Our team of technical experts will continue to provide insights, products and events to help you prepare and avoid disruption, during these uncertain times. To see what you have missed so far, please visit our website.

With Thomas Cook and its auditor continuing to make headlines this month, the FRC has sought to tighten requirements on auditors when they look at and report on going concern. See more in the A&A section below

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Chancellor confirms Budget no longer set for 6 November

On 25 October the Chancellor wrote to the Treasury Select Committee to confirm that the Budget will not take place on 6 November. You can read that letter here.

Events to help businesses get ready for Brexit

Departments across government are holding events to help businesses get ready for Brexit. To read more, please click here.

HMRC issue briefing: reform of off-payroll working rules

HMRC have issued updated guidance on the changes to off-payroll working in 2020. To read more, please click here.





New going concern standard issued

 The FRC has issued the new version of ISA (UK) 570 Going Concern and withdrawn Bulletins 2008/01 and 2008/10, which addressed specific audit-related going concern issues. The new auditing standard will be effective for audits of periods beginning on or after 15 December 2019. It states that extra work will be required on the auditor's part and improved transparency through a new explicit reporting requirement for auditors of public interest entities, as well as listed and large private companies. It also includes a 'stand back' requirement, which arguably makes explicit what should have already been done in terms of assessing all audit evidence obtained, when drawing a conclusion about going concern. The FRC has dismissed many of the concerns of those that responded to the Exposure Draft, though there has been some relaxation in that the previous proposals would have had additional going concern comment in the audit report for all entities, not just the narrower group above. For more information on the headline changes see our blog.

New Financial Reporting Lab report on cash disclosures

The FRC's Financial Reporting Lab has issued a report looking at disclosures on the sources and uses of cash. The report , which generally steers clear of talking about particular financial reporting frameworks, observes that cash position and management are matters of critical interest for users of accounts. It draws attention to creative ways of presenting and describing a company's generation and use of cash and shows many examples extracted from published annual reports. While the focus is on large companies, the underlying principles are still helpful and serve as a useful reminder that stakeholders generally are keen to use financial statements to predict the future even where they are presented as including only historical information.

Financial Reporting Council thematic review on transparency reporting

The FRC has issued its latest thematic review, which looks at the transparency reports that are a legal requirement of firms carrying out audits of public interest entities (PIEs). The conclusions were not positive - it seems that in many cases even audit committee chairs do not know that transparency reports exist. And some audit firms view transparency reports as being marketing material rather than as a tool for creating public trust in audit. One of the highlighted recommendations was that firms should make their reports shorter in order to enhance how useful they are. They should also share them with more prominence on their websites and add explanation on what the reports are actually meant to achieve.

Mercia's new International Audit Methodology

Mercia has launched its International Audit Manual Package. This product is designed to assist firms outside of the UK and Republic of Ireland comply with International Standards on Audit and International Code of Ethics requirements when undertaking audits. For more information on this new package, consisting of online implementation training, audit manual and audit procedures manual, click here.




Office anniversary

October marked the first anniversary of our move to Thorpe Way, our head office in Leicester. One Friday afternoon the team took an extended lunch break and enjoyed 'Pizza & Pie', indulging in a Mercia branded cake and several slices of delicious pizza.

Wear it pink day

Breast Cancer Now's wear it pink day is one of the biggest fundraising events in the UK. On 18 October, we wore pink and raised money to help make life-saving research and support happen!




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