Overview
This brochure aims to act as an aide-mémoire for Audit Committees during this December year end reporting season. The role and responsibilities of the Audit Committee are ever expanding in an increasingly challenging environment. This document has been designed to provoke your thoughts around key areas on the Audit Committee agenda as you go through your year end reporting.
The content has been updated where relevant since our March 2024 year-end aide-mémoire. Although there are numerous areas addressed in this aide-mémoire, some of the points will be of greater relevance to your organisations and others may already have received a degree of focus.
Accounting section
This overview provides an update to regulatory reminders and the current areas to focus on when thinking about year end reporting. Last autumn the Financial Reporting Council (FRC) identified areas that Audit Committee members need to consider including COVID-19 and climate change. These factors remain valid and are areas that boards should consider when signing off annual reports and general reporting in 2022.
Corporate Reporting and Governance section
In this section experts looked into the developments in corporate reporting, starting with reporting related to climate change as investors are increasingly looking into how organisations respond to climate-related risk and opportunities. The FRC has been much more active in the governance reporting space recently, and is now writing to companies about their governance reports as part of Corporate Reporting Review Team (CRRT) letters. It has also been giving a clearer steer on what is in line with the UK Corporate Governance Code or a departure from it.
Regulatory and Audit section
Restoring the Trust agenda, we are still awaiting the Government’s response to the BEIS consultation. Currently there is a high risk that the response might not make it onto the legislation to-do list for next year, which is frustrating for companies. But Audit Committees and Boards should consider opportunities for getting ahead of the change. In the Audit and Assurance policy there are large amounts of new and evolving information.
Fraud section
As we are in unprecedented times, it is essential that we look into why now is a good time to talk about fraud risk. Fraudsters have always tried to take advantage of emerging advances in technology and disruptive events. In this section we explore ways in which Audit Committees can protect, detect and respond to fraud.
Tax section
This overview covers the three current key themes for tax. The FRC’s focus on judgements and estimates is very relevant to tax. The two areas this typically covers are uncertain tax positions and deferred tax. Another focus and important to understand is whether you’ve got the right controls around tax accounting as a result of the BEIS report. And the third area is the OECD/ G20 framework which has undertaken ambitious reform around international taxation.
