Annal Nayyar blogs the DfE website today provides feedback from Education Funding Agency (EFA) seminars attended by auditors and academies on the introduction of this new framework, informationis now available for auditors on the regularity reporting for academies 2011-12

Following feedback from Education Funding Agency (EFA) seminars attended by auditors and academies on the introduction of this new framework, informationis now available for auditors on the regularity reporting for academies 2011-12. This information has been developed by the Institute of Chartered Accountants in England and Wales (ICAEW) to support the work of auditors in the provision of regularity reporting on academy trusts for the financial year 2011-12 and to promote consistency.

The Academies Accounts Direction 2011/12, published on 8 August 2012, introduced greater simplification and autonomy for academy trusts. One of the new developments in academy trusts’ 2011-12 financial statements is a requirement for accounting officers to make a statement on regularity, propriety and compliance. Academy trust external auditors are then required to provide an enhanced audit opinion covering regularity. This provides greater assurance to governing bodies and the Secretary of State, through the EFA, and means that the EFA is able to greatly reduce its need for assurance visits and other returns.

To allow the EFA to draw assurance from the external auditor’s regularity work, the EFA must be bound into the contract between the academy trust and the external auditors. To this end, the Academies Accounts Direction 2011/12 introduced a mandatory standardised terms of engagement which the external auditor and academy trust are required to sign up to within their own engagement letter. The standardised terms of engagement have been prepared with the assistance of ICAEW and are available on this page. These standardised terms of engagement include terms on limitation of liability. Any amendments and alterations to any terms may only be considered in very rare circumstances.

The information brings together existing information on regularity reporting and on assurance, in the context of academy trusts, to inform accountants’ professional judgement as they undertake engagements in the academies sector. The EFA strongly recommends that auditors of academy trusts refer to this information which can be downloaded from the ICAEW website.

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