Statement of responsibilities and Terms of Appointment

Statement of responsibilities

The responsibilities of auditors are derived from statute, principally the Local Audit and Accountability Act 2014 and from the NAO Code of Audit Practice. The responsibilities of audited bodies are derived principally the Local Audit and Accountability Act 2014 and from the Accounts and Audit Regulations 2015.

Nothing in the Statement is intended to limit or extend those responsibilities. In particular, audited bodies should note that, because auditors must not prejudice their independence, the role of the appointed auditor does not include providing financial or legal advice or consultancy services to the audited body.

PSAA issues the Statement of Responsibilities (the Statement) to serve as the formal terms of engagement between auditors appointed by PSAA and audited bodies. It summarises where the different responsibilities of auditors and of the audited body begin and end, and what is to be expected of the audited body in certain areas.

Auditors may wish to refer to, and/or incorporate, the Statement in audit planning documents, annual audit letters, reports and other audit outputs.

2017/18 audits

The statement issued by PSAA for principal local goverment and police bodies for 2017/18 can be found here:

Statement of responsibilities of auditors and audited bodies (LG and Police) 

2016/17 audits

The Statement, issued by PSAA, for local government, police bodies and NHS audits for 2015/16 and 2016/17 audits can be found here:

Statement of responsibilities of auditors and audited bodies

2014/15 audits

The previous Statements, issued by the Audit Commission, served as the terms of engagement up to and including audits for 2014/15. The Statements covering local government bodies, NHS bodies and small bodies can be found here.

Terms of Appointment

The Terms of Appointment set out additional requirements that auditors must comply with, over and above those set out in the Code of Audit Practice (the Code) issued by the National Audit Office (NAO) and in legislation, and cover matters of practice and procedure which are of a recurring nature. Each year, we will assess auditors’ compliance with these statutory Terms of Appointment. The key aspects of compliance that will be monitored are:

  • the delivery of audit outputs against target dates;
  • consideration and, if appropriate, approval of auditors’ requests for variations to the scale audit fee where they have had to carry out more (or less) work; and
  • consideration of, and where we are satisfied that the work does not create a threat to the auditor’s independence, approval of auditors’ proposals to provide non-audit services to audited bodies.

2017/18 and earlier years

For 2017/18 and earlier years, under Schedule 1 of the Local Audit and Accountability Act 2014, all contracts for audit and related services let by the Audit Commission were transferred to PSAA on 1 April 2015 and the Terms of Appointment were issued by PSAA under powers delegated by the Secretary of State for Communities and Local Government.

Terms of Appointment 2017/18 and earlier years