Auditor’s Report

A number of changes have been made to all Auditor’s Reports across all templates in line with the latest ISA requirements. Some of those changes are specific to the jurisdiction of the audit, where applicable this has been noted as either ROI or UK\NI. The changes are as follows:

Opinion

The ‘Opinion’ paragraph has been updated in accordance with ISA (Ireland) 700 paragraph 27. It requires that where the applicable financial reporting framework is not standards issued by the International Accounting Standards Board or the International Public Sector Accounting Standards Board, the auditor’s opinion shall identify the jurisdiction of origin of the framework. This paragraph will now reference that the Financial Reporting Standards have been issued in the United Kingdom by the Financial Reporting Council.

Going Concern

The ‘Conclusions relating to going concern’ paragraph has been updated in accordance with ISA 570 (UK and Ireland) Going Concern (Revised October 2019). This paragraph of text is applicable for year starts on or after 15 December 2019, the report will auto update to show this information based on the financial reporting date. The text is editable by clicking directly on the text on the page or by going to ‘Compliance Database, Auditor’s Report, Going Concern’. If the year start of the entity is before 15 December 2019 the existing paragraph of text for going concern will display.

Detection of Fraud

ISA (UK) 700 (Revised November 2019) requires that auditors’ report on the extent to which the audit was considered capable of detecting irregularities, including fraud. In accordance with this, a new paragraph of text has been added to UK\NI Auditor’s Report under the ‘Auditor's responsibilities for the audit of the financial statements’. The paragraph reads as follows;

“Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:”

A text box has been provided in the ‘Compliance Database, Auditor’s Report, Auditor’s Responsibilities’ where text relating to the extent to which the audit was considered capable of detecting irregularities, including fraud can be entered. Default text has been entered here to enable the user click directly from the page and modify as required, this text will also serve as a reminder to insert information.

Application of True and Fair View

A new optional paragraph has been added for Audit Reports prepared under FRS 105 in accordance with ISA (Ireland) 210 paragraph A38-2. The paragraph can be included by going to ‘Compliance Database, Auditor’s Report, Other Information Considered’ and selecting ‘Show the Other matter – application of true and fair view?’. Default text has been provided which reads as follows;

“The financial statements have been prepared under the micro companies regime which does not require the directors or the auditor to consider the inclusion of any disclosures necessary to give a true and fair view where these go beyond the minimum disclosures required by the Companies Act 2014 as applied to micro companies.”

This text can be modified by the user if included in the Audit Report.

Additional Best Practice Amendments

These amendments have been made in accordance with IAASA: Compendium of Illustrative Auditor’s Reports 2020 and Financial Reporting Council Illustrative Auditor’s Reports On United Kingdom Private Sector Financial Statements 2020.

ROI: The ‘Opinion’ paragraph will reference ‘the summary of significant accounting policies…’ instead of ‘a summary of significant accounting...’.

Opinion We have audited the financial statements of O‘Brennan Painters & Decorators Limited ('the company') for the financial year ended 31 December 2020 which comprise the Profit and Loss Account, the Statement of Financial Position, the Statement of Changes in Equity and notes to the financial statements, including the summary of significant accounting policies set out in note 2. The financial reporting framework that has been applied in their preparation is Irish Law and FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” issued in the United Kingdom by the Financial Reporting Council.

UK\NI: The ‘Opinion’ paragraph will reference ‘and notes to the financial statements, including significant accounting policies…’ instead of ‘and the related notes to the financial statements, including a summary of significant accounting policies…’.

Opinion We have audited the financial statements of Gatsby Antiques Limited ('the company') for the financial year ended 31 December 2020 which comprise the Profit and Loss Account, the Statement of Total Recognised Gains and Losses, the Balance Sheet, the Reconciliation of Shareholders' Funds, the Cash Flow Statement and notes to the financial statements, including significant accounting policies set out in note 2. The financial reporting framework that has been applied in their preparation is applicable Law and United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” Section 1A (Small Entities).

ROI: The ‘Other Information’ paragraph will reference ‘Our responsibility...’ instead of ‘In connection with our audit of the financial statements, our responsibility...’. It will also make reference to the ‘course of the audit’.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

UK: The ‘Other Information’ paragraph will reference the following;

• ‘contained within the annual report.’
• ‘Our responsibility...’ instead of ‘In connection with our audit of the financial statements, our responsibility...’.
• ‘course of the audit’
• ‘this gives rise to a material misstatement in the financial statements themselves…’ instead of ‘there is a material misstatement in the financial statements or a material misstatement of the other information.’

ROI: The ‘Opinions on other matters prescribed by the Companies Act 2014’ paragraph will reference ‘In our opinion, based solely on…’ instead of ‘Based solely on…’.

ROI: The ‘Matters on which we are required to report by exception’ paragraph will reference ‘which relate to disclosures of directors’ remuneration and transactions…’.

ROI: The ‘Responsibilities of directors for the financial statements’ paragraph will reference ‘in accordance with the applicable financial reporting framework that…’ and ‘if applicable…’ rather than ‘as applicable…’.

ROI: The ‘Auditor’s responsibilities for the audit of the financial statements’ paragraph will reference ‘in the aggregate…’ instead of ‘in aggregate…’.

ROI: The structure of the Auditor’s Report in abridged financial statements has been adjusted to display in order as follows;

1. Opinion
2. Basis of Opinion
3. Respective responsibilities of directors and auditors
4. Other Information required by the Companies Act 2014

Previously this layout had been;

1. Basis of Opinion (1)
2. Respective responsibilities of directors and auditors
3. Basis of Opinion (2)
4. Opinion
5. Other Information

Notes on Cash and Cash Equivalents

A new text box has been added to ‘Compliance Database, Statement of Cash Flows, Notes on Cash and Cash Equivalents’, ‘Text on reconciliation of net cash flow to movement in net debt’. Text entered to this box will appear under the ‘Analysis of Changes in Net Debt’ note of cash and cash equivalents.

Income and Expenditure Accounts available for Ltd By Shares Company

An option has been added to the ‘Compliance Database, Legislation, Compliance and Disclosure, Disclosure’, to show an Income and Expenditure Account for a company limited by shares. The use of this option will results in references to profit or loss becoming surplus or deficit, the Profit and Loss account being replaced by an Income and Expenditure Accounts and a Departure from Companies Act Presentation note being required to show.

Investment Property Accounting Policy Updated

In accordance with FRS 102 triennial review the accounting policy for investment property has been reviewed and updated accordingly. The updated text and policy will show for accounting periods commencing on or after 1 January 2019 by default, previously this had been user definable. The updated text is as follows;

“Investment property is property held either to earn rental income, or for capital appreciation (including future re-development) or for both, but not for sale in the ordinary course of business.

Investment property is initially measured at cost, which includes the purchase cost and any directly attributable expenditure. Investment property is subsequently valued at its fair value at each reporting date, by professional external valuers. The difference between the fair value of an investment property at the reporting date and its carrying value prior to the valuation is recognised in the Profit and Loss Account as a fair value gain or loss. Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in the Profit and Loss Account.”

This text can be manually edited from ‘Compliance Database, Accounting Policies, Investment Properties’.