Agenda item

External Audit - Progress and update report


The Engagement Lead introduced the progress and update report which sought to provide an overview of the current position for the 2020/21 audit plan. Members heard that due to the challenges presented during the previous year 2019/20 the timetable for the current financial had needed to be adjusted. However, the Committee was assured that the Council and pension fund audit would not be affected and that the complete audit plan would be finalised by April 2021.


The Engagement Lead provided a summary of the revisions to auditing standards which would affect the audit for the 2020/21. It was explained that during the period December 2018 to January 2020 the Financial Reporting Council issued a number of updated International Auditing Standards (ISAs (UK)) which would be effective for audits of financial statements for periods beginning on or after 15 December 2019. Members were asked to note a significant revision which had asked that External Auditors assess the ability of those charged with governance to oversee management’s process for making accounting estimates as well as how management had arrived at that those accounting estimates.


Members were provided with assurance around the revision of requirements regarding accounting estimates. The Director of Finance proposed a briefing session with the committee in May so that Members had the opportunity to consider the Council’s approach to accounting for estimates and preparing for the Audit. However, she also commented on the importance of the requirements upon the Committee as those charged with governance being formally recognised at the June meeting so that the Committee would be able to evidence its compliance and execution of its responsibilities. It was AGREED that a briefing session on accounting estimates be for Members of the Committee before the June meeting. The Engagement Lead agreed with the Director of Finance in confirming that all partners of the Council and other public sector bodies would be subject to the same auditing standards. It was AGREED that more detail be provided on implications for Council partners, where appropriate, at the accounts briefing session.


A detailed discussion took place regarding the increased workload presented by the revision to the International Auditing Standards and the ability of the Audit and Assurance Committee to deliver professional comment on accounting estimates. The Chair was given assurance from the Engagement Lead that an ongoing dialogue would continue between the external auditor and the Council management to ensure that they were able to provide the Committee with a detailed framework of what is expected when investigating and overseeing account estimate processes.


The Engagement Lead then highlighted the changes made as part of the revised approach to Value for Money audit work. The changes included more extensive reporting, with a requirement on the auditor to produce a commentary on arrangements across all of the key criteria, rather than the current ‘reporting by exception’ approach. A discussion took place regarding the framework and the  replacement of the binary (qualified / unqualified) approach to Value for Money conclusions, with far more sophisticated judgements on performance, as well as the requirement for key recommendations related to any significant weaknesses in  arrangements identified during the audit.

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