The Professional Oversight Board ("the Oversight Board"), part of the Financial Reporting Council, this week published a description of those entities whose audits will be deemed to be "major audits" for the purposes of audit inspections in the year from 1 April 2010 to 31 March 2011 ("2010/11"). Such audits come within the scope of the work of its independent Audit Inspection Unit ("the AIU") in 2010/11.
The Board has chosen to simplify the definition of UK unquoted companies, limited liability partnerships and industrial and provident societies to include all such entities having either a Group turnover greater than £500m or having a Group turnover in excess of £100million and external long term debt in excess of £250million. The Board has also chosen to include all banks incorporated in the UK as a separate category. No other significant changes have been made to the AIU's scope of inspection.
The Board has agreed that the AIU should have particular regard during its inspection work in 2010/11 to audit issues relating to segmental reporting, revenue recognition and fraud and continue to focus on going concern, fair value accounting estimates, asset impairments and compliance with ethical standards.
The Oversight Board welcomes comments on the scope of independent inspection by the AIU. Any such comments received during the year will be taken into account when the scope is next reviewed in March 2011.