THE AUDIT OF FRIENDLY SOCIETIES IN THE UNITED KINGDOM
Consultation Draft of a Practice Note
Comments from the Association of Chartered Certified Accountants
March 2002
General Comments
INTRODUCTION
ACCA is pleased to have the opportunity to comment on the Consultation Draft of a Practice Note The audit of friendly societies in the United Kingdom issued by the UK Auditing Practices Board (the Consultation Draft).
In view of the specialist nature of the subject matter, ACCA contacted approximately one hundred UK firms with friendly society clients for their views on the Consultation Draft. Their comments form the basis for this response.
SCOPE AND COVERAGE
The Consultation Draft updates material previously dealt with in Practice Note 7 The auditors' right and duty to report to the Friendly Societies Commission and provides new guidance on the application of general Statements of Auditing Standards. The document is, therefore, comprehensive in scope. Feedback from the firms we contacted indicates that users will be able to find in it the guidance which they need.
However, the Consultation Draft does not make its precise scope sufficiently clear to those uncertain of its application to their clients. It should, at the earliest possible opportunity, set out exactly which entities are being addressed and, for the avoidance of doubt, which entities are not, for example the many social clubs which are friendly societies.
COPY EDITING
The Consultation Draft should undergo further copy editing
before its publication to correct widespread inconsistencies in punctuation and
layout that have perhaps arisen as a result of combing text from different
sources. This process should also lead to the correction of associated problems,
such as:
- the abbreviation 'N2' is used without initial
explanation
- the term 'directors' is used without explanation when
a 'Committee of Management' is normal for a friendly society
- in paragraph 155, reference is made to the FSMA (Communication by Auditors) Regulations 2001. The word 'Communication' should be plural and it would be better to give the full reference to SI 2001, No.2587. The text quoted at bullet (iv) of paragraph 155 is clearly incorrect as it refers to the Companies Act 1985. It should instead refer to: 'have been prepared so as to conform with the Friendly Societies Act 1992 and the regulations made under it or, where applicable, give a true and fair view of the matters referred to in section 73(5) of that Act'.