Next Steps
The PSAA Board has considered the outcome of the consultation on changes to the fee variations system and agreed to implement the proposals in the light of the largely positive response.
As set out in the consultation, we have commissioned a programme of research to consider the likely impact on audit work and fees of some expected changes in audit requirements. It is possible that some changes in audit requirements may not result in an increase in audit work, but others are potentially significant and may be suitable for national fee variations. We are engaging with the NAO and FRC to test our thinking and ensure that any resulting additional fees determined are reasonably consistent with any other relevant assessments. We will consult with opted-in bodies and other stakeholders, including suppliers, on proposals for specific national variations. If for any reason revised regulations enabling the handling of national variations as outlined are not approved, PSAA’s default position would be to issue findings based on its research into relevant new standards and other relevant changes. This may include information on the likely range within which fee variations for associated additional audit work would be expected to fall (noting that there may be exceptions to that range due to local circumstances).
We will be working closely with MHCLG to ensure that implementation of the new arrangements is consistent with their work to reshape local audit in response to the recommendations of the Redmond review. We understand that they intend to publish more detail on their evaluation of options in Spring 2021.
Pending subsequent implementation of any changes to the local audit framework, PSAA will continue to discharge its statutory responsibilities, including setting fee scales and determining fee variations. In accordance with requirements we will publish the 2021/22 fee scale in March 2021. We will also be preparing to consult on the 2022/23 fee scale in the autumn and determining fee variations for audit years 2019/20 and 2020/21 during 2021 and 2022.