Agenda item

Informing the Audit Risk Assessment (External Audit Interim Report 2020/21)

To receive the report of Grant Thornton



D Rowley presented the Informing the Audit Risk Assessment of the External Auditors and gave a brief overview of the key points.  There had been effective two way communication during the audit and Management had responded to question around the key areas of control, the calculations and the key accounting estimates.  There was a renewed focus on accounting and the ISA 540 standard and this would be important through the year.  They would continue to monitor the events, issues and impact of Covid 19 together with financial pressures, government grants and the impact of the uncertainty of the market generally.  The value of fixed assets, pension liability and financial statements would also be considered. The External Auditors reported that no material fraud had been identified. The focus of their work had been principally on the possibility of fraudulent financial reporting or material misstatement of accounts.  There were robust controls within the environment which was echoed through the interim and previous work that had been undertaken with the Council.  Work would be undertaken to review the administration of the grants that the Council had received i.e. covid grants and the potential applications that had come forward.  With regard to the impact of laws and regulations the Council had processes in place and regulation ensured compliance and there had been no instances of non-compliance or suspected non-compliance which was a positive outcome and there was nothing coming forward to contradict this going forward.  Related parties arrangements were in line with what the External Auditors would expect to see.  The key accounting estimates and relevance to External Audit were highly subjective and changes in assumption or underlying input of calculations could lead to material misstatement in relation to PPE valuation, pension valuations and provisions within the accounts.  A summary and breakdown of the calculation of the estimates could be found at Appendix A to the report.


During the debate some Members asked what was used to provide an insight and overview of what was happening nationally.  Some Members stated that the Council’s accounts were produced fairly speedily and accurately and it would be useful to know comparatively how the Council were performing.  It was also asked if there had been any fundamental changes with regard to the accounting standards.  Other Members asked for a comparison/benchmark during the pandemic with regard to the Council Tax holiday, was it popular and how other Councils undertook this and if this came under the remit of External Audit.


The External Auditor informed Members that benchmarking was difficult due to the local information, when the audits were completed and the capacity of the auditors.  The Councils audit had been well run and gave an overview of what is happening generally under the public interest report.  Discussions were ongoing with regard to timelines in response to the audit market.  Currently the regulatory market ended in September and going forward this was achievable as the Council were in line with the date of the 1st August.  Benchmarking during the pandemic was not included in the report and depended on what Councils could do for their local areas and their cash flow.  This could be picked up as part of the accounts under value for money.  External Audit could look at the processes and ascertain whether the schemes had worked as they were expected.


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