Agenda item

To receive an update on:-

·              PSAA - Scale Fee Letter.

·              Grant Thornton - Audit Scope Letter.

·              Grant Thornton - Audit Plan Addendum.

Consideration was given to the update on External Audit by the representatives from Grant Thornton.

The update drew specific attention to the PSAA - Scale Fee Letter, Grant Thornton’s Audit Scope Letter and Grant Thornton’s Audit Plan Addendum and the key issues around fee assumptions and expectations, set out in the Statement of Responsibilities, summarised where the different responsibilities of auditors and of the audited body began and ended and what was to be expected of both in certain areas.

It was pointed out that the final fee for the audit would reflect the risk-based approach to audit planning as set out in the Code. Under the Code, auditors would tailor their work to reflect local circumstances and their assessment of audit risk. This would be achieved by assessing the significant financial and operational risks facing an audited body, and the arrangements it had put in place to manage those risks, as well as considering any changes affecting audit responsibilities or financial reporting standards.

Grant Thornton representatives also highlighted that in terms of their audit scope they were also effectively providing assurances for those charged with governance in order deliver a high quality audit to all users, whilst also seeking to maintain the fee within the envelope previously discussed.

The Council had been contacted to outline how the increased regulatory focus facing all audit suppliers was impacting on the planned audit programme and the expectations for the audit coverage for 2019-20, as well as for the audit fee.

It was further explained that managerial oversight would need to be increased to achieve this audit standard with even greater challenge of management being exercised in areas that were complex, significant or highly judgmental.  This additional work would need to be undertaken as detailed in the submitted letter attached to the agenda pack.

In terms of the Audit Plan Update it was highlighted that the preparation of financial statements in accordance with the relevant accounting standards and the Code of Audit Practice would be extended up to 31st August, 2020 and the date for audited financial statements to 30th November, 2020. 

Grant Thornton, External Auditors, would continue to liaise with the Council’s management to agree appropriate timescales and to be responsible for forming and expressing an opinion on the Authority’s financial statements and conclusions on the VFM arrangements.

In order to fulfil responsibilities under International Auditing Standards (ISA’s (UK)) the planning risk assessments had been revisited and consideration may need to be given to implementing changes to the procedures that were planned and reported in the Audit Plan to reflect current restrictions to working practices, such as the application of technology to allow remote working.

Additionally, it was confirmed since the Audit Plan was issued that the implementation of IFRS 16 had been delayed for the public sector until 2021-22.

In response to queries about remote working, the Council confirmed it was managing risks using technological innovations and would ensure the audit was undertaken remotely under the current circumstances.  All  the relevant safeguards and checks were in place with Grant Thornton for the progression of audits using safe data sharing platforms.

Resolved:- 

That the updates be received and the contents noted.