The FRC has announced audit thematic reviews, priority sectors and areas of focus.
The Financial Reporting Council (FRC) will, in 2019/20, supplement its routine Audit Quality Review (AQR) monitoring programme with two thematic reviews. These thematic reviews, which focus on aspects of audit practice across a number of firms to identify both scope for improvement and good practice, complement other AQR work, all with the over-riding objective of driving improvements in audit quality.
The thematic review topics are:
The FRC will publish its 2018/19 thematic review of “The Auditors Work on Other Information in the Annual Report” later in 2018, followed by a report on Audit Firm Transparency Reporting in the first quarter of 2019.
Priority sectors are those considered by the FRC to be particularly high risk in terms of corporate reporting and audit by virtue of particular economic or other pressures. The corporate reports and audits selected for review by the FRC in 2019/20 will have regard to the following priority sectors:
Areas of Focus
Audit areas of focus are specific aspects of audit work or non-sector specific factors which they expect to consider when reviewing an audit.
As part of their audit monitoring programme for 2019/20 the FRC expect to pay particular attention to the auditor’s work on:
The FRC will also consider the potential impact of Brexit, in both the selection of audits to review, and the individual areas of audit work to focus on.