The FRC’s changes reflect revisions made by the International Auditing and Assurance Standards Board (IAASB) and are designed to establish a more robust and consistent risk identification and assessment.

A more robust risk assessment process enhances the basis upon which auditors design and perform audit procedures that are responsive to the risks of material misstatement and, thereby, obtain sufficient appropriate audit evidence to provide a basis for the audit opinion. The FRC has strongly supported the IAASB’s work.

When finalised, the revised UK standard is proposed to be effective, in line with the international standard, for audits of financial statements for periods beginning on or after 15 December 2021.

Early adoption of the revised standard will be permitted and is encouraged.

In issuing the revised auditing standard for consultation, the FRC is not proposing to add any new UK requirements, given that the IAASB has sufficiently addressed matters raised by the FRC in its comment letter on the IAASB’s Exposure Draft.

The FRC is at the same time consulting on conforming amendments to other UK standards.

A link to the consultation and impact assessment can be found here.