3. Audit timetables and reporting the results of audit work
3.1 This section covers audit target dates and how auditors are required to report the results of audit work. This includes:
- timetable for completing the audit;
- the audit report and opinion;
- annual audit letters;
- auditor’s annual reports; and
- reporting to PSAA.
3.2 Section 4 sets out the process for auditors to notify PSAA if as a result of their work they intend to issue an audit report or other report or letter that includes any of the items set out below:
- any matters reported in the public interest in the course of, or at the conclusion of, the audit;
- any statutory recommendations; and
- the exercise of any other powers of the auditor under the relevant legislation.
3.3 Notification on auditor reporting matters should be provided to PSAA by the firm’s nominated contract manager using the agreed monitoring form via auditregulation@psaa.co.uk.
Timetable for completing the audit
3.4 The 2020/21 Code of Audit Practice specifies a requirement, from 2020/21, for timely reporting including producing audit reports in time, insofar as the auditor can do so under the auditing standards, to allow local bodies to comply with the requirements placed on them to publish their audited financial statements.
3.5 Auditors must include in the audit planning report a timetable for completing the audit. The expectation is that the audit report and opinion will be issued by the publishing date set out in the Accounts and Audit Regulations 2015 (or equivalent) insofar as the auditor can do so under the auditing standards and the guidance issued by the NAO.
3.6 Where, in the auditor’s view, it would not be possible to issue an audit report in compliance with the auditing standards and the guidance issued by the NAO by the publishing date, the audited body must be consulted on an alternative target date.
3.7 Where an alternative target date is set for the issuing of the audit report, the auditor should include a timetable for completing the audit in the audit planning report in accordance with that target date insofar as the auditor can do so under the auditing standards and the guidance issued by the NAO.
3.8 The auditor must notify the audited body promptly of any delays to the agreed timetable, and reissue the timetable having regard to those delays after further consultation.
3.9 Where the issue of an opinion is expected to be delayed beyond the publishing date the firm’s nominated contract manager must notify PSAA using the agreed monitoring form via auditregulation@psaa.co.uk including an explanation for the delay and expected date for resolution (based on the information available to the auditor at the time). In addition to the obligations in clause 4.23 of the Firm’s contract with PSAA Auditors must update PSAA when the matter has been resolved or if there is a further delay. This requirement covers (where applicable):
- the audit report and opinion (including the pension fund opinion and value for money arrangements conclusion where applicable);
- the auditor’s annual report; and
- the audit certificate.
3.10 In order to meet the information requirements of NAO, DLUHC and HMT from time to time PSAA may require regular updating of information on outstanding audit opinions and progress on a weekly or monthly basis in accordance with the contractual obligations including clause 5 and schedule 9 of the Firm’s contract with PSAA.
3.11 The audit planning report should include details of:
- the scale fee for the audit of body as set by PSAA;
- any variations to the scale fee anticipated at the planning stage together with the underlying reasons; and
- outline the proposed work programme including any planned pieces of risk-based value for money work.
3.12 PSAA will review a small sample of audit planning documents for contract management purposes. The firm’s PSAA Contract Manager will be notified of the review sample.
The audit report and opinion
3.13 The audit opinion, (including value for money arrangements conclusions where required), audit certificate and any statutory reports, Auditor’s Annual Letter and any statutory reports must be signed by a Key Audit Partner. This also applies to Statements of Reasons and other correspondence in relation to the exercise of an auditor’s statutory duties (Chapter 4).
3.14 Auditors must notify PSAA if they issue a non-standard audit report and opinion.
3.15 PSAA does not require draft copies of non-standard audit reports. In cases where a firm ultimately decides that a non-standard report is not required this should be notified to PSAA.
3.16 PSAA will obtain copies of final non-standard reports if required from submissions to the NAO’s Local Audit Reporting Tool.
3.17 Chapter Three of the 2020 Code covers auditors’ work on VFM arrangements and specifies the following reporting requirement in paragraph 3.14: “Where the auditor identifies significant weaknesses in arrangements as part of their work on arrangements to secure value for money, they should make recommendations”. The 2020 Code further expects that auditors will raise such matters promptly during the course of the audit. Chapter Four of the 2020 Code requires in relation to the auditor’s report of the financial statements that “Where the auditor is not satisfied in respect of arrangements to secure value for money, they should refer to this by exception” (paragraph 4.5). These reporting arrangements may be varied by Auditor Guidance Notes. PSAA will collect information on reported significant weaknesses using the agreed monitoring form arrangements via auditregulation@psaa.co.uk
Auditor’s annual reports
3.18 From 2020/21 the Annual audit letter is replaced by the auditor’s annual report. The 2020/21 Code of Audit Practice specifies that for PSAA’s audited bodies, the auditor’s annual report should be published no later than 30 September (or other data as specified). Where the auditor is unable to do this, he or she should issue an ‘audit letter’ including a statement explaining the reason for the delay. Either format constitutes an audit letter for the purposes of local bodies complying with the s20 Accounts and Audit Regulations 2015.
Reporting to PSAA
3.19 PSAA may require further information from time to time, or may vary the frequency of requirements in response to sector need. Auditors must comply with requests received in accordance with clause 5 and schedule 9 of the Firm’s contract with PSAA.
3.20 Such additional requests will be kept to a minimum, and a protocol for information requests is included in Appendix 1. A protocol for liaison between PSAA and appointed auditors is included in Appendix 2.