In the UK and other jurisdictions, the inexorable rise in audit exemption thresholds means that more and more companies are no longer subject to a statutory audit. Some directors of such companies are, no doubt, relieved at no longer having to pay an externally imposed expense. But all directors still need to have confidence in their company’s accounts, processes, and financial information. This can be obtained in a variety of ways—voluntary audit is one, but also other, more focussed assurance services offer choice, and the profession needs to be able to develop these services and exploit this demand, otherwise, frankly, someone else will.
Audit exempt companies can have an ICAEW Assurance Review, which offers limited assurance and can be more focused than the traditional one-size-fits-all audit. Other engagements can be designed to, for example, provide increased comfort over the methodology behind a company’s budgeting system or to the propriety of its management accounts and their having been prepared in accordance with agreed bases. Businesses can enter into specific agreements with their accountants knowing exactly what assurance they will obtain over particular subject matter.
The article, “Why Bother with Assurance?” explores how, in these circumstances, practitioners might proactively seek to help clients and potential clients by offering more assurance services. I’d very much appreciate your views!
For guidance on conducting review engagements in compliance with the IAASB’s (ISRE) 2400 (Revised), Engagements to Review Historical Financial Statements, see the IFAC SMP Committee’s Guide to Review Engagements. For more support on a variety of assurance services, see the Audit & Assurance Resources tab.
