Auditing Implications of the War in Ukraine – Part 2


The war in Ukraine is an evolving human tragedy. In last week’s blog we looked at some of the key implications that may impact on the work of auditors, even if one’s clients have no immediate connections with Ukraine/Russia. This week we continue with a quick reminder of some pertinent topics for auditors to consider.

Non-compliance with laws and regulation (NOCLAR)

Auditors fulfilling their responsibilities under ISAs (especially ISA 250 Consideration of Laws and Regulations in an Audit of Financial Statements) with respect to laws and regulations will be auditing and reporting in a constantly changing environment. This may be the case right up to the point of signing the auditor’s report, depending on the period end of the entity and timing of the audit. Auditors will need to be vigilant and maintain regular communication with management in order to monitor NOCLAR up to the signing of the audit report.

It will often be difficult for management to ensure that they have complied with laws and regulations, let alone articulate how they have complied.

Post balance sheet events

For companies with 31 December 2021 year ends, the war in Ukraine would be considered a non-adjusting event, because the conditions did not exist at the end of the reporting period. For 28 February 2022 period ends and later, the impact of the war is an adjusting event.

Management’s disclosures about material non-adjusting events, and related estimates of its financial effect, must be appropriately disclosed in the notes to the financial statements and auditors will need to check these disclosures.

We will conclude our review of these issued in next week’s blog.

Are your AML Policies Controls & Procedures up to date?

We have just released our latest Anti-Money Laundering Policies Controls & Procedures Manual (March 2022) – View the Table of Contents click here.

We have also just released an updated AML webinar (March 2022) available here, which accompanies the AML Manual. It explains the current legal AML reporting position for accountancy firms.

To ensure your letters of engagement and similar templates are up to date visit our site here where immediate downloads are available in Word format. A bulk discount is available for orders of five or more items if bought together.

For our latest Audit Quality Control Manual (October 2021) (implementing the latest Irish Audit & Accounting Supervisory Authority standards including ISQC1 on audit quality control) click here. View the Table of Contents here.