The FRC issued updated guidance for audits of entities of all sizes that may be subject to the risks associated with using financial instruments. The guidance aims to enhance investor confidence in the depth and reliability of the audit.
Nick Land, FRC Board member and chairman of the Audit and Assurance Council, said: "Financial instruments is an area of financial reporting involving complex issues, which came under particular focus in the financial crisis. This new update is intended to assist auditors in understanding the nature of, and risks associated with, financial instruments, the different valuation techniques and types of controls that may be used by entities in relation to them, and identifies the important audit considerations."
The FRC previously issued updated guidance for auditors in 2009 and consulted on the updated guidance in October 2012. The updated guidance is given in Practice Note 23, 'Special Considerations in Auditing Financial Instruments', and reflects the clarified International Standards on Auditing (ISAs) (UK and Ireland) and guidance issued by the International Auditing and Assurance Standards Board (IAASB) in its International Auditing Practice Note (IAPN) 1000. The final updated guidance is substantially unchanged from that consulted upon.
Press release
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