Interpretation and Application of UK GAAP: For Accounting Periods Commencing On or After 1 January 2015

Chapter 2The Statutory Audit Requirement and Accounting Principles

1. Introduction
2. The Statutory Audit Requirement
3. The Reform of Audit in 2012 and the Implications
4. The Concepts and Pervasive Principles
5. Qualitative characteristics
6. The Financial Statement Elements and the Recognition and Measurement of those Elements

Introduction

There is still a statutory audit requirement in the UK and Republic of Ireland despite the introduction of a new financial reporting regime and this chapter will consider the statutory audit requirements together with the relaxations of the audit requirements introduced into legislation in the UK in 2012.

The auditing profession has been in the headlines a lot over recent years and in the majority of cases for all the wrong reasons. Auditors have been subjected to significant amounts of criticism due to the financial crisis that started in 2007/8, and in many cases have even been blamed for allowing certain institutions to ‘get away’ with issues that they would otherwise not have been allowed to.

Regulators are keen to ensure that the value of audit is restored and that the general public have confidence in auditors and the reports that they issue on entities' financial statements. For this reason, the regulators such as the Financial Reporting Council (FRC) have been carefully scrutinising the financial statements of various entities, and professional bodies have also been carefully regulating audit firms to ensure that the appropriate standards of audit ...