Top 10 issues for the 2013/14 closedown

In our regular feature, Ask The Auditor, Graham Liddell from Grant Thornton UK LLP sets out ten areas for practitioners to consider as they close down their accounts for 2013/14.  To ask Graham a technical query, email editor@room151.co.uk

Based on the queries I have received from practitioners and auditors, here is my list of the top 10 issues to consider for the 2013/14 closedown. Inevitably new and emerging issues will arise between now and September. I will keep you up to date with any general themes in future blogs.

1.        Do your accounts tell the overall story of the authority’s financial performance and financial position? Are they clear, concise and easy to follow? Is detailed information on the most important information easy to find? Have you removed duplicated text, non-material notes and zero entries?

2.        Are your accounts internally consistent? In particular, does the movement in reserves statement agree to the detailed notes?

3.        Can you demonstrate that your programme of revaluations is sufficiently up to date to ensure that the carrying value of property, plant and equipment does not differ materially from the fair value at 31 March 2014?

4.        Can you demonstrate that you have accounted for provisions in accordance with IAS 37?

• Have you considered the need for provisions for business rates, equal pay and restoration and aftercare of landfill sites?
• Are your provisions the best estimate of your liability (rather than a prudent estimate or an amount that is convenient for budget purposes)?
• Do you have a robust evidence based methodology to support your estimate?
• Are there any instances in which you have not made a provision because you cannot make a reliable estimate? Do you have robust evidence to support your judgement that a reliable estimate is not possible? Have you disclosed a contingent liability?

5.        Is your PFI accounting model up to date? Have you disclosed:

• the fair value of your PFI liabilities?
• information on the impact of inflation on your PFI commitments?

6.        Have you addressed the new accounting requirements in 2013/14 for the presentation of IAS 19 pension costs and a new service line for Public Health? Have you restated your comparatives?

7.        Have you disclosed your accounting policy for schools? For those schools that you do not recognise on your balance sheet have you disclosed information about school assets, income and expenditure?

8.        If you prepare pension accounts have you included the following disclosures required by the Code that are in addition to those set out in the CIPFA example pension fund accounts:

• the relationship between net assets available for benefits and the present value of promised retirement benefits
• an accounting policy for measurement of assets held at amortised cost.

9.        If you prepare group accounts, are you satisfied that the accounts of your subsidiaries, associates and joint ventures are robust? Have you brought accounting policies in line with those of the authority? Have you eliminated all intra-group transactions and balances?

10.     Have you agreed your detailed closedown plan with your auditors? Does this include:

• how you propose to deal with known major issues?
• a protocol for dealing with new issues as they arise?
• a date for a post-implementation review?

Graham Liddell is Grant Thornton UK LLP’s national technical lead for the public sector. No responsibility or liability is accepted by Grant Thornton UK LLP towards any person or organisation in respect of the use of, or reliance on, information contained in this column.