2018/19 work programme
- Under the provisions of the 2014 Act, the NAO is responsible for publishing the statutory Code of Audit Practice (the Code) for auditors of local public bodies. Further information on the Code and supporting guidance is available on the NAO website.
- Audits of the accounts for 2018/19 will be undertaken under the Code published in April 2015, on the basis of the fee scale fee set out in this document.
- PSAA has set the 2018/19 fee scale with the expectation that there will be no significant changes in NAO guidance for auditors, professional standards, or CIPFA/LASAAC financial reporting requirements that would affect materially the amount of audit work to be undertaken for 2018/19 audits.
Scope of audit
- The Code sets the overall scope of the audit, requiring the auditor to give an opinion on the financial statements of a principal body subject to audit under the 2014 Act, and a conclusion on the arrangements for value for money.
- Auditors are required to use judgement to design an audit approach that meets their statutory responsibilities under the Code and the 2014 Act. The Code requires auditors to carry out their work in compliance with the requirements of the relevant professional standards issued by the Financial Reporting Council and relevant quality control standards.
- The Code requires that the auditor’s work should be risk-based and proportionate. Auditors tailor their work to reflect local circumstances and their assessment of audit risk. They do this by assessing the significant financial and operational risks facing an audited body, and evaluating the arrangements it has put in place to manage those risks.
- The audited body is responsible for putting in place appropriate arrangements to support the proper conduct of public business, and for ensuring that public money is safeguarded, properly accounted for and used with due regard to value for money.
Other auditor responsibilities
- Under the 2014 Act the auditor has powers in addition to the responsibilities in relation to an authority’s financial statements and arrangements to secure value for money. These additional responsibilities and duties broadly relate to giving electors the opportunity to raise questions about the accounts, and considering and deciding on objections received in relation to the accounts. The fee scale set out in this document does not cover work on objections, for which additional fees are chargeable.
- Auditors have no responsibility under the 2014 Act for certifying claims or returns for grant paying government departments. Where such work is requested, a separate tripartite engagement between the relevant department, the audited body and a reporting accountant is needed. PSAA has no powers to make certification arrangements from 2018/19, and its audit contracts do not cover certification work.
- PSAA is very aware of the need to maintain and, where possible, strive for improvements in audit quality. Our responsibilities in this area are emphasised in the contracts we have entered into with audit firms.
- We are developing new arrangements for monitoring and reporting on audit quality, based on the International Auditing and Assurance Standards Board Framework for Audit Quality. We will publish regular reports on the managing audit contracts page of our website. The company is also establishing the Local Audit Quality Forum, which will place particular emphasis on supporting the effectiveness of local audit committees.
- Under the provisions of the 2014 Act, the Financial Reporting Council and the recognised supervisory bodies have regulatory responsibility for the quality of audit work produced by audit firms.
- PSAA will publish a report in 2019 summarising the results of auditors’ 2018/19 work on the financial statements and arrangements to secure value for money.