The UK's Auditing Practices Board (APB) has decided to defer its revision of the International Standard on Auditing (UK and Ireland) 700 (ISA 700) on the auditor’s report on financial statements, which it published for consultation in December 2004.

It believes that forthcoming changes to UK company law, the revision of the EU’s 8th directive on company law and ongoing work by the International Auditing and Assurance Standards Board on clarifying the wording of ISAs mean that it is not the right time to adopt the latest version of ISA 700, which would have been effective for reports dated on or after 31 December 2006, when further changes are likely to be necessary. It said it would take the comments made on the draft standard into consideration as its work on auditor's reports develops.

The APB has also issued a consultation draft of its guidance for the audit of insurers. The guidance addresses the replacement of statements of auditing standards with international standards on auditing. Also included is direction on the extension of the scope of auditors’ work on insurance companies introduced by the Financial Services Authority.

Richard Fleck, APB chairman, said as well as providing guidance on the new standards relating to audit risk and fraud, the consultation is a useful consolidation of past bulletins. Comments are invited by 14 March.

January 2006