Newswire December 2019

  • Mercia Group
  • 20 December 2019 00:00

Following the General Election the EU (Withdrawal Agreement) Bill is now making its way through Parliament. We will keep you updated on Brexit. 

With pre-election publication restrictions lifted, and some major desk clearing pre-Christmas, we have seen a flurry of important publications over the past few days that will have significant implications for firms conducting audit work.  A new Ethical Standard, updated UK Audit Standards and the much-anticipated publication of Sir Donald Brydon’s review on the quality and effectiveness of audit were all published in quick succession.  Has Christmas come early?  Take a look at the A&A section below and our initial thoughts in our blog to find out more.

It has certainly been a busy end to the year. Thank you for your support in 2019 and we look forward to working with you again in 2020. Don't forget to renew your training membership before the end of December to take advantage of our offer to renew at 2019 prices. You can also buy course credits at 2019 prices to use in 2020 (or 2021 as they are valid for 24 months!) if you purchase before 31 December 2019.

Wishing you all an enjoyable festive season and a happy and healthy New Year.

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EU (Withdrawal Agreement) Bill

The EU (Withdrawal Agreement) Bill is required to ratify the Withdrawal Agreement, as agreed between the United Kingdom and the European Union, and implement the Agreements (EU, EEA EFTA and Swiss) in domestic law. This Bill ensures that the United Kingdom is able to fulfil its international obligations, and leave the European Union with a deal. To read more, please click here.

Statement from the Secretary of State on the Clinician Pension Tax Scheme

The Secretary of State for UK Work and Pensions has confirmed that the commitments being entered into to make payments to clinicians, affected by annual allowance pension tax, will be honoured when clinicians retire. To read more, please click here.

Welsh government draft Budget

The Welsh government has published its draft Budget setting out revenue raising and capital spending plans for 2020/21. No changes are proposed to Welsh income tax rates or land transaction tax rates and bands. To read more, please click here.




Brydon review published

The long-awaited Brydon review on the quality and effectiveness of audit has been published. It is a long document with many detailed recommendations, aimed explicitly at the audit of public interest entities (PIEs). However, if the recommendations are implemented, they would be likely to have a knock-on effect on firms auditing non-PIEs too. For instance if the ARGA produced a plain English guide to audit it would need to be applicable to all types of audit, and a change in the Companies Act definition of audit would, again, apply to all.  You can read more of our initial thoughts and analysis of Sir Donald’s recommendations here.

Changes to FRC Ethical Standard and ISAs (UK)

Also published this month have been the changes to FRC standards that were discussed earlier in the year. Most of the changes are in line with the original proposals, so in the Ethical Standard there is increased focus on the view of an 'objective reasonable and informed third party; an enhanced role for the ethics partner; more detailed audit reporting requirements for PIE audits; and a clamping down on the provision of non-audit services to audit clients.

The auditing standards changes look at working with group auditors, more detailed audit reporting for PIEs, clarifications on auditing other information, and at assessing the effects of non-compliance with laws and regulations.

The effective date for the new auditing standards is for audits of financial statements with periods commencing on or after 15 December 2019.  There is then a delayed implementation date of 15 March 2020 for most of the changes to the Ethical Standard. You can read more of our initial thoughts and analysis of the changes here.

New ICAEW Code of Ethics for 2020

There is a revised version of the ICAEW Code of Ethics, which was issued in November 2019 and is effective for assignments or engagements beginning from 1 January 2020.  This is the first substantive update since 2011, and aligns the Code with the provisions of the comparable code by the International Ethics Standards Board for Accountants (IESBA). Although the new code looks quite different, due to restructuring, there are few additional requirements. In some areas where the IESBA code has new material, eg non-compliance with law and regulation, ICAEW already had supporting material in place so substantive changes were not needed. And in some places the FRC Ethical Standard was already stricter than the IESBA changes (for instance on cooling-off and partner rotation periods).

Other A&A news

Other publications of note include:

  • Amendments to FRS 102 – Interest rate benchmark reform which align the treatment of IBOR reform with recent changes to IFRS 9. This is relevant to entities that use hedge accounting and are affected by possible future changes in interest rate benchmarks
  • FRED 73 Draft amendments to FRS 101 – 2019/20 cycle that proposes minor amendments to improve the consistency of the disclosure exemptions in relation to the statement of cash flows and related disclosures and
  • The Financial Reporting Council has announced the areas it will be focusing on in its 2021/21 review cycle and four thematic reviews of corporate reporting.




Helping local people in crisis

Every year we support a local charity that helps those less fortunate than ourselves. This year the team has generously donated items to create Christmas hampers for B-Inspired Community Charity. Each hamper contains food to help feed families and individuals who are struggling to put food on the table this Christmas. For more information about the charity and how to donate you can visit their website by clicking here.

Christmas holiday opening hours

Our office will be closed from 12.30pm on Monday 23 December to 8.45am on Thursday 2 January 2020.

Thank you for all your support in 2019. We wish you all a happy, healthy and prosperous New Year and we look forward to working with you again in 2020!

Christmas Jumper Day

The team's Christmas jumpers were out in full force to help raise money for Save the Children.




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