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The Auditing Practices Board (APB) has issued Bulletin 2008/01  Audit Issues when Financial Market Conditions are Difficult and Credit Facilities may be Restricted. The Bulletin provides guidance for auditors faced with audit issues arising due to the 'credit crunch'. Key points include:

• it has been written to apply more generally than just to the auditors of financial institutions, focusing on the possible risks of mis-statement to financial statements for all entities
• it deals with the possibility that finance may be less freely available
• the valuing of assets for balance sheet purposes, especially when 'fair value' measurement is used may also be problematic
• potentially the going concern basis could be affected in extreme cases
• the Bulletin utilises existing guidance from the APB, and draws on existing standards. For auditors of banks and insurance companies, there is additional guidance in Practice Notes 19, 20 and 21
• the Bulletin has been drafted to provide guidance for audits of December 2007 financial statements, but will probably also be relevant to other audits taking place in 2008. 

The Bulletin can be downloaded from APB's website 

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