Risks and the statutory audit – new Irregularities statement

For accounting periods commencing on or after the 15th of December 2019 , revisions to auditing standards (ISA (UK) 700)  extended the requirement of auditors to include an explanation in the audit report, explaining to what extent the audit was considered capable of detecting irregularities, including fraud.

Whilst this isn’t a new area, the requirement to report this is. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error.

From an understanding of the legal and regulatory framework that the scheme operates in and  from discussions with trustees, knowledge and experience of the pensions sector, auditors will focus on the areas that may give rise to intervention from the Pensions Regulator or maybe of concern to HMRC as a UK registered scheme.