Accounting Standards

FRC to consult on review standard for interim financial statements

The Financial Reporting Council (FRC) has announced it has launched a consultation on the proposed revision of its review standard for interim financial statements.

The FRC has recently reviewed ISRE (UK) 2410 in the context of changes to auditing standards, particularly ISA (UK) 570 Going Concern. As a result, it is proposing to revise parts of ISRE (UK) 2410 to ensure it “remains fit for purpose in the current environment”.

The FRC added its specific objective in performing this limited revision to ISRE (UK) 2410 is to address a “potential lack of clarity in relation to going concern when performing a review of interim financial information”.

The FRC’s revisions are limited to those areas which address going concern, however the FRC is also interested in respondents’ views on a potentially more systematic revision of ISRE (UK) 2410 in the future, and as such, welcome comments on both the specific revisions to ISRE (UK) 2410 and on reviews of interim financial statements as a whole.

It said: “The FRC has recently reviewed ISRE (UK) 2410 in the context of changes to auditing standards. As a result, we are proposing to revise parts of the standard to ensure that it remains fit for purpose in the current environment. Our specific objective in performing this limited revision to ISRE (UK) 2410 was to address a potential lack of clarity in relation to going concern when performing a review of interim financial information.

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“We undertook this work to ensure that the level of work carried out by auditors reflects wider expectations on going concern, particularly given recent high profile corporate failings, and aligns with the requirements of ISA (UK) 570 Going Concern.”

The consultation will run until 19 February 2021.

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