Audit and Assurance news

Chartered Accountants Ireland has responded to the Financial Reporting Council's (FRC's) invitation to comment on the Practice Note (PN) Guidance for audits of smaller and/or less complex entities in the UK.  The FRC launched a consultation on a PN to support auditors in the application of International Standards of Auditing (ISAs) UK when auditing smaller and/or less complex entities. This consultation is part of the FRC’s year-long SME campaign.  As a general overarching point, Chartered Accountants Ireland does support the development of additional guidance in principle as small and medium-sized practices (SMPs) need to be able to apply ISAs UK in a scalable and proportionate manner given current challenges experienced in the small and medium-sized enterprise (SME) audit market. A key element of our response outlines that a more preferrable course of action (rather than introduction of a PN) would be to begin the process to adopt the International Auditing and Assurance Standards Board’s (IAASB) International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (‘ISA for LCE’), with public consultation on adoption of the ISA for LCE being a necessary step in the process.  Chartered Accountants Ireland has also responded to specific FRC consultation questions outlining enhancements and changes needed to the current version of the PN.  The main item we highlight throughout our response to the consultation relates to the fact that the PN, in its current form, is difficult to apply and use due to the lack of alignment mapping to the underlying ISAs, which would aid ease of reference when navigating the ISAs and would help SMPs apply ISAs in a more scalable and proportionate manner. In addition, we have recommended certain enhancements to the PN content and wording including examples provided in the PN to support SMPs with implementing the guidance more effectively and proportionately particularly in the context of the following ISAs: ISA (UK) 315 Identifying and Assessing the Risks of Material Misstatement ISA (UK) 240 Fraud ISA (UK) 500 Audit Evidence ISA (UK) 570 Going Concern ISA (UK) 540 Estimates ISA (UK) 330 Auditor’s Responses to Assessed Risks ISA (UK) 600 Special Considerations - Audits of Group Financial Statements (Including the Work of Component Auditors) Revised Ethical Standard 2024

IAASA has published an updated edition of its Compendium of Illustrative Reports. The update reflects the auditing standards and legislation in effect at 30 June 2025. The Compendium includes example audit reports for: Financial statements of a private company Financial statements of a private group Financial statements of a micro company Revised financial statements Abridged financial statements Financial statements of a qualifying partnership Financial statements of an industrial or provident society Financial statements of a friendly society Key changes in this edition include: An updated and simplified link to the description of the auditor’s responsibilities on IAASA’s website. Updated language in the auditor’s opinion section to refer to ‘material accounting policy information’, where relevant. This reflects changes to certain accounting standards and updates in the International Auditing and Assurance Standards Boards’ handbook. Inclusion of sample wording to reflect the requirements of S.I. No. 322/2023 – European Union (Disclosure of Income Tax Information by Certain Undertakings and Branches) Regulations 2023. For reports prepared under the Companies Act 2014, the auditor must include a statement whether the entity was required to publish a report on income tax information for the previous financial year. Updated legal references, amended terminology, and new footnotes within the example reports for industrial and provident societies and friendly societies, providing additional guidance for auditors on the content and format of their report. Auditors are encouraged to review the updated examples to ensure that their audit reports align with current requirements. The updated Compendium is available to download from the Auditing Standards Page of IAASA’s website

IAASA has issued a public consultation on their draft work programme for the period 2026 – 2028. Please see the consultation and draft work programme . The due date is no later than 5pm on 22 August 2025.

The Financial Reporting Council (FRC) has issued a consultation on a proposed UK version of the International Standard on Sustainability Assurance (ISSA) 5000, “General Requirements for Sustainability Assurance Engagements”. The consultation proposes ISSA (UK) 5000 for use on a voluntary basis by assurance providers. The FRC proposes alignment with the international standard in order to minimise burdens for firms carrying out assurance engagements across multiple jurisdictions. The profession-agnostic Standard supports application by both professional accountants and other assurance practitioners, provided they meet the relevant quality management and ethical requirements. During its recent study of the UK sustainability assurance market, stakeholders expressed support for an assurance framework that provides a clear and internationally consistent approach to sustainability assurance. Stakeholders are invited to comment until 31 July 2025 on the appropriate adoption of ISSA 5000 for the UK market by emailing AAT@frc.org.uk. Read the consultation Read the summary of findings from the FRC’s market study on the UK’s sustainability assurance market Read the IAASB’s ISSA 5000 Implementation Guide providing practical non-authoritative guidance intended to assist practitioners in implementing ISSA 5000

Following public consultation last year, IAASA has published a revised Ethical Standard for Auditors (Ireland). As part of the revisions to the standard, IAASA has also updated its Glossary of Terms. IAASA has also published a feedback paper which summarises its response to the main points raised by the consultation respondents. The effective date of the revised standard is for audits of financial statements for periods beginning on or after 15 December 2026. Early adoption is permitted. The feedback paper is available here. The responses received are available here. The revised standard is available here. The revised Glossary of Terms is available here.    

The International Auditing and Assurance Standards Board (IAASB) has released its revised International Standard on Auditing 570 (Revised 2024), Going Concern. The revised standard responds to corporate failures that raised questions regarding auditors’ responsibilities by significantly enhancing the auditor’s work in evaluating management’s assessment of an entity’s ability to continue as a going concern. The revise standard is effective for audits of financial statements for periods beginning on or after 15 December, 2026. ISA 570 (Revised 2024) introduces several key changes: Robust risk assessment. Auditors must conduct, in a more timely manner, thorough risk assessments to determine whether events or conditions are identified that may cast significant doubt on the entity’s ability to continue as a going concern. Evaluating Management’s Assessment. Auditors must evaluate management’s assessment of going concern irrespective of whether events or conditions are identified. In doing so, auditors must consider the potential for management bias and evaluate the underlying method, significant assumptions, and data used when management formed its assessment. Additionally, auditors must evaluate whether management’s judgements and decisions indicate potential bias. Extended date of evaluation period. The auditor’s evaluation period for going concern now extends at least twelve months from the date of approval of the financial statements, contributing to an assessment of more relevant, decision-useful information. Enhanced transparency. The standard requires clearer communication in the auditor’s report about the auditor’s responsibilities and work related to going concern and strengthened communications with those charged with governance and external parties. The IAASB also developed a fact sheet and Basis for Conclusions, which are available on the IAASB’s website. The IAASB will also issue a frequently asked questions document and technical overview video to support the revised standard’s implementation.