The Audit Process is Changing - you need to act now
- 13th July 2020
Last week the ESFA has released the latest Academies Financial Handbook, effective from 1 September 2020. The main talking point is the clarification that the ESFA confirm that they consider internal scrutiny to be viewed in the same way as internal audit.
External auditors no longer able to provide internal audit. The new FRC ethical guidelines places additional restrictions on the services that an external auditor can provide to academies. This includes an outright prohibition on the ability to provide internal audits. No matter how you label these services - whether internal audit, internal scrutiny or internal assurance, it means an audit firm can no longer provide internal and external audit services for the same client. There are no safeguards that can be put in place for this to work. For example, it is no longer possible to use the same firm, but different engagement partners and different offices.
This means that if you currently have the same firm providing the internal and external audits for your academy, even if provided by a different partner, department or office, from 1 September 2020, you will need to ensure you have separate audit firms for each of the audits.
What do academies need to do?
Please be under no illusion, there is no way around this.
You need to take action now and start to consider alternative firms for either your internal or external audit. This news is going to cause a big shake up in the sector but we are here to help.
Forrester Boyd complete internal audits for many academies, including single trusts and MATs, and would love to speak with you to explain our approach to the service.
We understand that no two Trusts are the same and we always tailor our approach to suit you.
Any news or resources within this section should not be relied upon with regards to figures or data referred to as legislative and policy changes may have occurred.