Professional judgement – making better choices

ICAEW’s practical research-based learning tool can help auditors to better understand and exercise good professional judgement as an integral part of the audit process, effectively record these judgments and comply with regulations.

ICAEW’s interactive, self-directed, elearning programme Applying Professional Judgment in Audit is free to members and offers four hours of verifiable continuing professional development (CPD).

There are four modules on:

• the raw material of judgement;
• the process of judgement;
• the Financial Reporting Council’s (FRC’s) professional judgement framework; and
• improving your own professional judgement.

Visit ICAEW’s Professional judgement hub to find a range of related resources. 

Private capital ownership of uk audit firms

The FRC recently outlined its position on private capital ownership of any UK audit firms, not just firms that hold public-interest-entity authorisation with the FRC. 

Following recent media interest in private capital ownership of UK audit firms, the FRC explains its approach in a September 2024 open letter addressed to audit firms and recognised supervisory bodies (RSBs), including ICAEW. 

The letter offers some reminders on what UK law requires of firms undertaking statutory audit work, outlines its concerns around external private capital investment in UK audit firms, and important risks that need to be managed. 

The letter states that any registered audit firm interested in, or considering a change of ownership structure to introduce private capital should engage with the FRC (in addition to its RSB) at an early stage.

All such discussions will be strictly in confidence.

ICAEW can offer support on understanding the implications of ownership changes.

Any ICAEW firm considering private capital investment can contact ICAEW’s Regulatory Practice and Policy team at auditregistration@icaew.com for more information.

An ICAEW Insights article provides helpful background to the approach being taken by the FRC.

Updated audit regulations

UK Audit Regulations were updated during 2023, more changes came into effect from 1 October 2024 and other changes are expected from early 2025. Individual ICAEW members, ICAEW member and regulated firms, and non-members who are registered with ICAEW for statutory audit may be affected.

The changes relate to:

• continuing professional development (CPD);
• compulsory alternates for sole practitioners;
• sanctioning of responsible individuals (RIs) by the Audit Registration Committee;
• a firm’s eligibility to be audit registered; and 
• mandatory notification of movement of audits.

The updates are being staggered to give firms time to adapt and to ensure compliance. 

To understand what is happening, when and why, read about:

• changes to UK Audit Rules effective 1 October 2024 and the roadmap for coming changes;
• feedback on proposed changes to CPD, compulsory alternates, RI sanctions, and ICAEW responses;
• revised audit eligibility requirements and whether your firm will meet them; and 
• the proposed notification of movement of audits and related criteria (and consultation on this). 

Practical topical webinars

Don’t forget to explore your library of faculty webinar recordings. Recent additions cover: 

• hot topics for 2025 audits;
• tips and common pitfalls in preparing and auditing cash flow statements; 
• practical tips for the auditor’s review of management spreadsheets; and
• answers to your questions on global sustainability reporting and assurance.

Technical updates

The Audit & Assurance Faculty provides news from regulators and standard setters in Technical news in brief, which can also be accessed from the Audit & Beyond hub page.