New powers over municipality audit
Further measures have been announced to assist ensure taxpayers get good value by improving the effectiveness and transparency of municipality audit.
The Audit, Reporting and Governance Authority (ARGA) – the new regulator being created switch the Financial Reporting Council (FRC) – is going to be strengthened with new powers over municipality audit, protecting public funds and ensuring councils would be best serving taxpayers.
The new regulator, which will have a standalone local audit unit, brings all regulatory functions into one place, to higher coordinate a new, simplified local audit framework.
ARGA continues to act as regulator and execute audit quality reviews because the FRC does now, but probably now provide annual reports on the state of local audit and take over responsibility for the updated Code of Local Audit Practice – the rules councils are required to follow.
The government has announced £15 million to aid councils with a lot more costs in audit fees, and recently consulted on the distribution of the funding. Government is also consulting on improving flexibility on audit fee setting and it has extended the deadline for when councils must publish their audited accounts.
Rob Whiteman, CIPFA CEO, said: "CIPFA welcomes the announcement the Audit, Reporting and Governance Authority will be the new systems leader for local audit. We’re pleased to see ARGA gather regulatory functions, the Code of Audit Practice, reporting on local audit functions, and gratifaction monitoring and review.
"Our concerns around audit supply and market instability remain. It is vital that any changes towards the local audit system concentrate on these problems and emphasise the requirement for high quality audits within the short and longer term.
"Local authority accounts are vital to transparency and accountability. Just like all of those other public sector and also the private sector making certain useful information in accounts is obtainable to users has become increasingly difficult, the statement of accounts is often referred to as long and sophisticated. CIPFA props up Redmond Review recommendation for any summary statement that is in a position to communicate key messages to its council tax payers, service users and other key stakeholders."
