Statement of responsibilities of auditors and audited bodies (from 2023/24 audits)

Introduction to statement

1. PSAA appoints auditors to relevant authorities that have opted into its appointing person scheme under Regulation 13 of the Local Audit (Appointing Person) Regulations 2015 (the AP regulations). The relationship between the appointed auditor and audited body is statutory rather than contractual.

2. This statement serves as the expected terms of engagement between appointed auditors and audited bodies as referred to in 1-33 of Statement of Recommended Practice Note 10 (Audit of financial statements and regularity of public sector bodies in the United Kingdom). 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. The contents of this statement will be kept under review and maybe modified from time to time in line with changes to legislation and industry practice.

3. The responsibilities of audited bodies are derived from the Code of Audit Practice, the Accounts and Audit regulations 2015 (the AA Regulations), the Local Audit and Accountability Act, the Local Government Act 2003, and the Code of Practice on local authority accounting published by CIPFA/LASAAC.

4. The responsibilities of auditors are derived from statute, principally the Local Audit and Accountability Act 2014 (the Act) and from the Code of Audit Practice (the Code) issued by the NAO on behalf of the Comptroller and Auditor General. Audits are conducted in accordance with the Financial Reporting Council’s (FRC’s) International Standards on Auditing (UK).

5. The successful delivery of an audit under the Code is, however, predicated on the audited body meeting its statutory responsibilities to provide the auditor with the facilities and information the auditor reasonably requires for the purposes of their functions on a timely basis and to an appropriate standard.

6. The NAO has the power to issue guidance to auditors under Schedule 6 paragraph 9 of the Act. Auditor Guidance Notes (AGNs) set out guidance to which local auditors must have regard to under Section 20(6) of the Act.

7. Nothing in this statement is intended to limit or extend statutory responsibilities or expectations. 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. The FRC’s Revised Ethical Standard (December 2019), (FRC Ethical Standard), applies at all audits of local public bodies. AGN 01 General Guidance to Supporting Local Audit should be read in conjunction with the Ethical Standard as it provides supplementary guidance as the expectations relating to Public Interest Entities are extended to all local audit bodies.

8. Auditors may wish to refer to this statement in their communications with those charged with governance; audit planning documents, audit findings reports, auditors’ annual reports, reports and other audit outputs.

9. This document should be read in conjunction with the Code, the relevant legislation and professional standards.

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