The BBA is now integrated into UK Finance. Please go to www.ukfinance.org.uk for new content and updates from UK Finance.
Material published by BBA prior to 1st July 2017 is still available on this website.
From 1 July 2017, the finance and banking industry operating in the UK will be represented by a new trade association, UK Finance. It will represent around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation will take on most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association.x
The Financial Reporting Council (FRC) has been looking at how best to rationalise some of the audit guidelines in place by better integrating the guidance into the auditing standards themselves. As part of this, it announced on 14 July that it would be replacing Practice Note 16 with additional application material in ISA (UK) 330 – The Auditor’s Responses to Assessed Risks and ISA (UK) 505 – External Confirmations
The proposed changes which are minor in nature would apply to the audit of financial periods beginning on or after 15 December 2017. They do not change the requirements on auditors, but are intended to reduce the amount of guidance in issue, and to better integrate that guidance with auditing standards.
The revised guidance in ISA (UK) 330 applies to the audit of financial periods beginning on or after 15 December 2017 and reads:
A50. The auditor may determine that external confirmation procedures performed for one purpose provide an opportunity to obtain audit evidence about other matters. For example, confirmation requests for bank balances often include requests for information relevant to other financial statement assertions. Such considerations may influence the auditor’s decision about whether to perform external confirmation procedures.
In the UK, depending on the auditor’s risk assessment, the auditor considers whether confirmation is needed in relation to additional information such as trade finance transactions and balances or information about guarantees and other third party securities, in addition to the confirmation of balances and other banking arrangements usually provided in such a request.
A51. Factors that may assist the auditor in determining whether external confirmation procedures are to be performed as substantive audit procedures include:
The underlying processes remain the same, and auditors can utilise the forms first prepared under PN16 or the BBA Confirmations service.
To download the PN16 Bank Reports Contact List and the list of UK banks using Confirmation.com please visit the UK Finance Bank Audit Requests page here.
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