The ICAEW has issued new guidance for accountants who report to regulators of utility businesses on regulatory information. The Technical Release, Audit 05/03, Reporting to Regulators of Regulated Entities, aims to help bridge the expectations gap between the assurances regulators think are provided and what accountants are able to deliver.
The guidance emphasises the need for the accountant, the regulator and the regulated entity to hold tri-partite discussions and clarify the scope of the engagement and individual responsibilities in relation to it. It uses Audit 1/01, Reporting to Third Parties as a starting point and provides examples of engagement contracts and of an unqualified audit report for Regulatory Accounts.
Draft Ethical Standards issued
The Auditing Practices Board has issued five Exposure Drafts of proposed APB Ethical Standards for auditors' integrity, objectivity and independence.
The Ethical Standards aim to set out basic principles and essential procedures with which auditors are required to comply in any audit of financial statements.
The standards are:
• ES 1, Integrity, objectivity and independence;
• ES 2, Financial, business, employment and personal relationships;
• ES 3, Long association with the audit engagement;
• ES 4, Fees, economic dependence, remuneration and evaluation policies, litigation, gifts and hospitality; and
• ES 5, Non-audit services provided to audit clients.
The APB has published a consultation paper on the draft standards covering the key elements in its approach and highlighting significant issues in relation to draft standards ES 1 to ES 4. There is also a more detailed discussion of the approach adopted in ES 5 to the complex area of the provision of non-audit services to audit clients. Responses to the consultation paper are requested by 1 March 2004.
New reporting models
The ICAEW has issued a report on New Reporting Models for Business as part of its Information for Better Markets campaign. The report examines recent proposals for reforming business reporting. The deadline for comments is 31 March 2004.
• Financial Reporting, p78 and p80.