Newswire September 2022

AUDIT & ACCOUNTING

FRC publishes first of its kind professional judgement guidance for auditors

The Financial Reporting Council (FRC) has published comprehensive professional judgement guidance for auditors to improve how they exercise professional judgement. Professional judgement is key to high quality audit, however the FRC regularly identifies poor professional judgement as one of the most significant issues affecting audit quality. The new guidance includes a framework for making professional judgements and a series of illustrative examples.

FRC sets out next steps in transition to new regulator

The Financial Reporting Council (FRC) has published a Position Paper setting out the next steps to reform the UK’s audit and corporate governance framework. The paper follows the Government Response to the consultation on strengthening the UK’s Corporate Governance, Corporate Reporting and Audit systems, including the creation of the Audit, Reporting and Governance Authority (ARGA), to replace the FRC. It builds on the areas of the Government Response that fall within the FRC’s remit, providing advanced clarity for stakeholders on how the work of reform will be delivered ahead of government legislation. This includes revising existing codes, strengthening auditing and accounting standards, setting expectations to drive behavioural change ahead of statutory powers, and the development of guidance to address issues set out in the Government Response.

Updated ICAEW TAS helpsheet: Accounting for a hive-up under FRS 102

The ICAEW Technical Advisory Service (TAS) has issued an updated version of its helpsheet to assist understanding of the accounting for a hive-up under FRS 102. The helpsheet states that ‘the term hive up is commonly used to describe a type of restructure within a group of companies when the net assets of, and business undertaken by, a subsidiary are transferred up into the parent company’.