Bank audit letters changes for December 2008 year ends
Practice Note (PN) 16 'Bank reports for audit purposes in the United Kingdom (Revised)', issued in December 2007 by the Auditing Practices Board (APB), applies for periods commencing on or after 26 December 2007, i.e. December 2008 year ends except for companies with short accounting periods. All auditors should use the new letters for December year end requests.
Download the templates for the new letters or from 'related documents' (see left).
Practice Note 16 provides further guidance, and can be downloaded from 'related documents' (see left).
The following provides an overview of the changes. This has been agreed between the UK auditing profession and the British Bankers Association (BBA) and is extracted from an agreed flyer you may receive from your clients' bankers:
Q: What changes do I have to make, as an auditor?
A1: The main change is that auditors are required to provide the customer's main sort code and account number for each legal entity on their audit request and a facility account number for trade finance or derivative & commodity trading information (if required). This will enable the banks to find the right details for their customer and not search for facilities that may otherwise not exist.
A2 Along with the revisions to PN16 come 3 specially designed request templates to help you gather the information you need:
- standard (inc. option to request additional info on trade finance and derivative & commodity trading)
- fast-track (only to be used in circumstances whereby the reporting deadline is a month or less after the year end/ audit confirmation date)
- incomplete information (use this form in exceptional circumstances and the auditor will be expected to acknowledge that the bank's response may take longer than usual to process)
These templates are to be used in conjunction with auditors' own note paper and must include full contact details for the auditor.
A3 Banks are no longer required to report on custodian arrangements, so the option to request this has been removed from the audit request templates. You will no longer be able to request this information from the Banks.
A4 Although auditors do not need to provide a new Authority to Disclose (ATD) for a client each time they submit an audit request, please ensure that the ATD for each customer is reviewed with your client and make sure all legal entities are covered and the authorisation signatures are appropriate.
- a new authority will be needed in the case of a new audit entity
- an updated authority will be needed in the case of entity changes e.g. new group entities/ auditor changes
A5 To ensure that audit requests are sent to the correct location for each bank to process as quickly as possible, please use this link to the BBA site which lists every bank's contact details.
(NB. Please ensure you send the audit request to the correct address as specified, otherwise this can increase the timescale for completion)
A6 If an auditor requires acknowledgement from a Bank to confirm receipt of the audit request, and provided the Bank offers this service (usually within 5 working days), please supply your email address on the audit request template for the Bank to use and a unique reference number which does not identify the client.
A7 To ensure that the Bank has sufficient time to pull together the required information, auditors are reminded to send the request in to reach the Bank one month in advance of the period end date. However it would be advisable to send in more than a month in advance around peak periods such as March and December year ends.