The Housing Corporation is currently reviewing two regulatory documents – Circular 25/01 and Good Practice Note 7.
Circular 25/01: Five years on
Five years have passed since Circular 25/01 on internal controls assurance was published, and now the Housing Corporation wants to determine whether or not its objectives have been achieved.
Since implementation, most RSLs have, as required, established a regular process for reporting to their boards on whether or not the structure of internal controls has been effective, and summarising the key points for their annual accounts.
However, there has been debate about whether this is the best way of ensuring that RSLs pay sufficient attention to their internal controls or if this is just another, somewhat repetitive, bureaucratic process replicating others – in particular, the requirements for risk management.
Due to this debate, the Housing Corporation decided to review the Circular and its intended objectives in order to determine what changes, if any, are needed.
Smith & Williamson has been assisting the Housing Corporation with the review. The findings are expected to be published before the end of the year.
Good Practice Note 7: An update
For similar reasons, Good Practice Note 7 on external audit is also under review. There have been a number of fairly significant developments which impact on the relationship between external auditors and their clients, and the ways in which external auditors are appointed.
These developments include the International Standards on Auditing, the EU procurement rules, the greater awareness of responsibility amongst audit committees, revised ethical standards that limit the roles external auditors can play beyond an external audit, and the volume of mergers resulting in increased frequency of more than one firm of auditors within a group.
We have also been assisting the Housing Corporation with this review, which is similarly expected to be completed by the end of the year.
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