Auditing and Assurance Standards and Guidance

FRC Bulletins

Bulletin: Compendium of illustrative auditor's reports on United Kingdom private sector financial statements for periods commencing on or after 17 June 2016

Describing the applicable financial reporting framework

5.	In accordance with ISA (UK) 700 (Revised June 2016), the Opinion section of the auditor's report shall make reference to the applicable financial reporting framework used to prepare the financial statements. In the UK, the applicable financial reporting framework is usually one of the following:

International Financial Reporting Standards (IFRSs) as adopted by the European Union, and the national law that is applicable when using IFRSs and, in the case of consolidated financial statements of publicly traded companies,³ Article 4 of the IAS Regulation (1606/2002/EC).

The financial reporting framework that has been applied in their preparation is applicable law, and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

United Kingdom Generally Accepted Accounting Practice (UK GAAP), which comprises applicable UK law including one of the following UK Accounting Standards as issued by the FRC:

Financial Reporting Standard 105,⁴ where the financial statements are those of an entity that is eligible to apply FRS 105 and the entity opts to do so;⁵

Financial Reporting Standard 101,⁶ where the financial statements are the individual financial statements of a qualifying entity, and the entity opts to do so;

Financial Reporting Standard 102.⁷

The financial reporting framework that has been applied in their preparation is applicable law, and United Kingdom Accounting Standards, including [Financial Reporting Standard 101 Reduced Disclosure Framework] [Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland] [Financial Reporting Standard 105 The Financial Reporting Standard applicable to the Micro-entities Regime] (United Kingdom Generally Accepted Accounting Practice).

³ A publicly traded company is one whose securities are admitted to trading on a regulated market in any Member State in the European Union.

⁴ Financial Reporting Standard 105 The Financial Reporting Standard applicable to the Micro-entities Regime (FRS 105).

⁵ Entities which prepare their annual financial statements in accordance with FRS 105 are not required by UK legislation to have an audit and it is anticipated that the entity will opt to have an audit only in rare circumstances. Further guidance on such matters is included in paragraph A36-1 and A36-2 of ISA (UK) 210 (Revised June 2016) Agreeing the Terms of Audit Engagements.

⁶ Financial Reporting Standard 101 Reduced Disclosures Framework (FRS 101).

⁷ Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102).