The Audit Inspection Unit (AIU) of the Financial
Reporting Council (FRC) is widening the scope of its independent
audit inspections to building societies while keeping a closer eye
on professional scepticism.
The AIU said that in its 2011/2012 inspections the
watchdog will keep a focus on UK incorporated banks, but has
decided to remove the existing assets threshold that previously
applied for building societies. This means all UK building
societies will now fall within AIU’s scope.
“The board has agreed that the AIU should have
particular regard in 2011/12 to fair value accounting estimates and
disclosures, impairment of assets, revenue recognition, related
parties and going concern, including whether appropriate
professional scepticism has been applied in these areas,” the FRC
said.
The AIU said it will also put additional emphasis
on the quality of reporting to audit committees in its 2011/2012
inspection.
