UK Auditors will now be required to assist pension trustees to help ensure member records are complete and accurate separate to the audit.
But in its new guidance The Pensions Regulator (TPR) stated scheme auditors are not obliged to do any more than is required under the Auditing Practices Board auditing standards to fulfil their statutory responsibilities.
TPR said the statutory auditor will not necessarily carry out tests to assess member records unless there is a significant risk of material misstatement in the accounts.
The auditor will also only consider the control environment to the extent it can impact on the financial transactions reported in the accounts.
Auditors are expected to exercise professional judgement to assess the likelihood of particular risks leading to a material misstatement of the financial transactions in the accounts. If significant errors in member records are found they are to be reported to the trustees at the conclusion of an audit.
The TPR statement has been issued to help trustees understand the extent and limits of the auditor’s work during a statutory pension scheme audit. It also emphasises that trustees should not assume their scheme auditor will be testing the quality and accuracy of member data or the controls around that data.
“We were pleased to contribute to this statement, which we hope will help to reduce a fairly widespread ‘expectation gap’ among trustees as to the extent that member records are tested during the course of a scheme audit,” Institute of Chartered Accountants of England and Wales pensions committee chairman Zahir Fazal said.