Blog Article

Cloud technologies are shaking up the audit market

By Jon Martingale

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By Jon Martingale

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Updated 1st September 2021 | 5 min read Published 19th August 2013

There is a major change to accounting standards coming soon. The change should not be underestimated, could be a steep learning curve for accountants, and planning for it should start now. No, this is not a blog post on iXBRL from 2010, but the change that is coming is equally as significant.

In recent times, International Financial Reporting Standards (IFRS) have been developed to provide a common accounting framework and ‘language’ for businesses across the world. Slowly but surely the IFRS framework is replacing many of the different national accounting standards around the world.

For practices in the UK, we are seeing a slight variation on this theme. From 2015, the current UK GAAP (Generally Accepted Accounting Principles) accounting standards we all know and love are set to be replaced by a new framework developed by the FRC. The FRS 101 and 102 standards are based on IFRS, but with some changes to allow for Companies Act 2006 legislation and a few other localisation amendments.

As you no doubt know, IFRS has been mandatory for all publicly owned limited companies and subsidiaries since 2005. The good news is that FRS 101 will allow parent and subsidiary members of groups currently applying full IFRS to report using a reduced set of disclosures moving forward. So, this should mean less time spent on preparing such accounts.

All other medium to large sized companies (FRSSE companies are excluded but changes are planned here too) will need to comply with FRS 102 from January 2015. This is a significant change not to be underestimated and your planning and preparation should start now. The changes will have an impact on all accountants and consideration will be needed on how you can ensure that your clients meet the new requirements for company disclosure.

IRIS has an unbeatable track record of being prepared for new legislation and statutory requirements well ahead of the deadline. We delivered IFRS compliance for publicly listed companies ahead of time in the lead up to the initial transition in 2005, we made iXBRL a straightforward process and delivered a solution some 6 months ahead of schedule, and we are now focused on delivering FRS 101 and 102 updates to support accountants in practice and industry.

To help you prepare for FRS 101 and 102 we have put together a free guide: "5 key facts about FRS 101 and 102". This guide looks at the following topics:

• What are FRS 101 and 102?

• Why are these standards being introduced?

• Who will be affected?

• When does the changeover to FRS 101 and 102 take place?

• How will these changes affect the software that accountants use in preparing accounts and returns?

Download the free guide now (Link to whitepaper)

The audit market could soon go through a major change, with the Competition Commission proposing plans to make it mandatory for audit services to be put up for tender every five years. It is hoped that this will increase the level of competition within the industry.

This recent announcement from the Competition Commission may take some of the UK’s largest businesses out of their comfort zone if they have been with the same accountancy practice for many years, but I think it is great news for the UK accountancy market and many IRIS customers. This change would give all audit firms the chance to compete on more of a level playing field against the ‘big four’ who have traditionally dominated the market.

Auditing work has always provided an opportunity for accountancy firms of all sizes, but the manpower needed and large volume of paperwork involved often meant that the work could not bring in enough money to make it a viable offering. As cloud technology becomes mainstream and we introduce solutions like IRIS OpenAudit - the UK’s first online audit solution - many of these barriers are immediately removed, offering smaller practices the chance to undertake audit work for the first time.

Cloud computing has already been billed as a modern day ‘industrial revolution’ in many sectors. New technology has helped to reduce costs, delivered operational agility and efficiency, and reduced reliance on expensive and critical IT infrastructure. Accountancy practices are now being offered similar benefits.

Solutions can be consumed over the internet using a web browser, meaning accessibility from any internet connected device (inc tablets). And the data accessed is ‘real time’ and stored securely online, which means it can be a key part of a firm’s disaster recovery plans.

At IRIS, we use cloud technology to help accountants to work more efficiently and offer high quality additional services. With this in mind, we have delivered an innovative solution to assist accountancy practices when carrying out audit work with the recent launch of IRIS OpenAudit. The new offering drives productivity by giving audit teams the freedom to work from any location and stay connected when in different locations, provides a wide range of entity coverage making it suitable for all audit firms, and delivers workflow efficiencies to improve recoverability rates.

At the same time, IRIS OpenAudit is updated automatically outside of UK business hours. This is another benefit of cloud technology and gives our users the confidence that they are accessing the latest fully compliant version without experiencing downtime while a software update as added.

Find out how a cloud auditing solution can benefit your practice with a free 14 day trial of IRIS OpenAudit.