ACCA response to FRC Proposals to make minor revisions to ISA UK 330 and Withdraw Practice Note 16

ACCA's response to FRC's proposals to: Make minor revisions to ISA (UK) 330 (Revised June 2016) The Auditor’s Responses to Assessed Risks and ISA (UK) 505 External Confirmations; and Withdraw Practice Note 16 – Bank Reports for Audit Purposes in the United Kingdom.

ACCA welcomes the opportunity to respond to the invitation to comment (ITC) issued by the Financial Reporting Council (FRC) on Technical Proposals to: Make minor revisions to ISA (UK) 330 (Revised June 2016) The Auditor's Responses to Assessed Risks and ISA (UK) 505 External Confirmations; and Withdraw Practice Note 16 – Bank Reports for Audit Purposes in the United Kingdom.

The Financial Reporting Council (FRC) proposes, subject to stakeholder views, to make minor revisions to ISA (UK) 330 (revised June 2016) - The Auditor's Response to Assessed Risks, and ISA (UK) 505 - External Confirmations. These changes will support the withdrawal of Practice Note 16 - Bank Reports for Audit Purposes in the United Kingdom.

The FRC's position is that the proposed revisions do not affect the work effort required of auditors in this respect; however, they do allow the FRC to streamline the amount of guidance currently in force. As a result, there are no separately identifiable costs and benefits arising from this proposal, and we are able to confirm that we anticipate that no additional work effort results from regulatory decisions taken by the FRC.

ACCA’s view is that while the FRC’s proposals do not specifically reference the issue, external confirmations may become more significant in future as a result of audit data analytics. In an environment where the auditor has access to significant amounts – perhaps all – of a company's financial data, external confirmations may be a vital link between the audited entity’s data and the real world to provide evidence that the company’s data is not only consistent but accurate.

Our detailed comments in respect of the specific questions within the ITC paper are set out in the attached document.

Members of ACCA's Audit and Assurance Global Forum have considered the matters raised and their views are represented in ACCA’s comments.