Did you know that non-audit work is covered by the new audit regulations?

Under the new audit regulations that are now in force any work that you undertake as a registered auditor is within the scope of some of the audit regulations. So any assignment you undertake where you are required to be a registered auditor, even if it is not an audit, is now caught. For example:

• Reporting on client money under the Solicitors Accounts Rules.
• Reporting as an independent examiner on a friendly or industrial and provident society.

Not all of the regulations are applicable as many refer specifically to ‘audit work’ or ‘the auditor’ and work as a reporting accountant does not fall within the scope of the definition ‘auditor’ or ‘audit work’. However, regulations that relate to having systems of quality control, complying with ethical standards and doing the work to a proper standard are applicable and the Audit Registration committee now have the power to review any work signed as a registered auditor to ensure that the firm is complying with the standards necessary to remain as a registered auditor.

What does this mean in practice?

In practice this means that the QAD can now look at an SAR file for compliance with the audit regulations. The fact that the QAD can look at an SAR file is not actually a change; they could do this before from a practice assurance perspective; however, that would have been a fairly high level review. Now, from a perspective of compliance with the audit regulations, more detailed reviews are likely and indeed some firms have already started to see this happening.

Andy Holton
July08