Corporate Reporting 2025 Syllabus Updates

Chapter 1: Introduction

The Workbook's first chapter introduces several important updates:

• A new definition of professional judgement has been introduced, emphasising the application of relevant training, knowledge, and experience within auditing, accounting, and ethical standards. This definition underscores the importance of making informed decisions in audit engagements.
• The Financial Reporting Council (FRC) structure information has been updated, now comprising an Executive Committee, two governance committees (Audit & Risk and People), and a Conduct Committee. This restructuring aims to enhance the FRC's effectiveness in overseeing financial reporting and auditing practices.
• The Conduct Committee's responsibilities have been expanded to include various schemes and procedures related to accountancy, actuarial work, and auditor regulation. This expansion reflects the growing complexity of the financial landscape and the need for comprehensive oversight.
• Following the 2024 UK general election, the Audit Reform and Corporate Governance Bill was proposed, paving the way for the Audit, Reporting and Governance Authority (ARGA) implementation. While changes are forthcoming, it's important to note that for exam purposes, the UK regulator remains the FRC.

Chapter 2: Principles of Corporate Reporting

This chapter contains several key updates:

• FRS 102 was revised in January 2022, addressing multi-employer defined benefit plans, interest rate benchmark reforms, COVID-19 related rent concessions, and the UK's exit from the EU. These revisions reflect the dynamic nature of financial reporting standards and their adaptation to global events.
• SME audit exemptions in the UK have been a topic of discussion, with Accountancy Europe's analysis showing a lack of consensus among European countries on thresholds and approaches. This ongoing debate highlights the need for balanced regulation that supports both transparency and business growth.
• Environmental, Social, and Governance (ESG) factors, including climate change and social inequality, present significant risks and opportunities for businesses.
• The IASB Work Plan as of July 2024 includes several projects with expected milestones through 2025, such as updates to IFRS for SMEs and subsidiaries without public accountability disclosures.

Chapter 3: Ethics

The ethics chapter introduces several important updates that reflect the evolving landscape of professional conduct:

• The Public Interest Disclosure Act (PIDA) in the UK protects whistleblowers from detrimental treatment when raising genuine concerns in the public interest. This legislation underscores the importance of ethical behaviour and transparency in the workplace.
• The FRC published an updated Ethical Standard effective from 15 December 2024. While not examinable in 2025, this update demonstrates the ongoing refinement of ethical guidelines in the profession.
• The 2023 revision to the IESBA Code highlights the requirement for understanding technical, professional, business, and technology-related developments. This emphasis on continuous learning reflects the rapidly changing nature of the accounting profession.
• The IESBA Technology Working Group explored the impact of technology on accountants, resulting in revisions to the 2023 Code. These revisions address issues such as maintaining competence in rapidly changing technological areas and the potential risks of over-reliance on technology.
• The UK Government's second Economic Crime Plan (2023–2026) addresses challenges in combating economic crime, with key goals including enabling legitimate economic growth and reducing money laundering. As future Chartered Accountants, you'll play a crucial role in implementing and adhering to these initiatives.

Chapter 4: Corporate Governance

• Excessive director remuneration has been a long-standing corporate issue, often seen as disproportionate to company performance and employee remuneration. The syllabus now includes examples of shareholder activism challenging executive pay.
• January 2024 Code revisions aim to balance UK competitiveness with positive outcomes for companies, investors, and the public. Key changes include a focus on board decisions and outcomes, promoting diversity and inclusion, and more detailed disclosures on risk and internal controls.
• The FRC's "Audit Committees and the External Audit: Minimum Standard" guidance highlights Audit Committee responsibilities, including ensuring access to a competitive audit market and managing auditor independence.

Chapter 5: The Statutory Audit: Planning and Risk Assessment

• The FRC published its Professional Challenge Framework to enhance professional scepticism and management challenge. Recent enforcement examples highlight the consequences of inadequate professional scepticism.
• The use of Automated Tools and Techniques (ATTs) in audits is becoming more prevalent, particularly for journals and revenue audits. While technology improves audit efficiency and quality, professional judgement and experienced auditors remain critical.
• The chapter also introduces concepts related to artificial intelligence (AI) and its potential applications in auditing, such as generative AI for content creation and customer service chatbots.

Chapter 6: The Statutory Audit: Audit Evidence

• Observation, while not typically used as a standalone audit procedure, is frequently utilised in inventory management processes to verify inventory existence, valuation, and completeness.
• Advances in AI-supported technology enable data analytics to process significantly larger datasets, facilitating more sophisticated audit testing. The accuracy of analytical procedures depends on the proper and skilful application of technology.

Chapter 7: The Statutory Audit: Evaluating and Testing Internal Controls

• AI-powered tools provide auditors with smart analytical technology, enabling more efficient testing of larger populations with increased speed and improved quality.
• Cloud-based solutions have made auditing more accessible by offering flexible and affordable options suitable for nearly any firm.
• The chapter also addresses the growing importance of cybersecurity, including recent data breaches and the consequences of non-compliance with data protection regulations such as GDPR.

Chapter 8: The Statutory Audit: Finalisation, Review and Reporting

• The FRC's Plan and Budget 2024–25 emphasises the importance of a risk-focused, proportionate, and timely enforcement regime to maintain trust in audit, corporate reporting, and governance.
• An April 2023 exposure draft of a proposed ISA 570 revision aims to address key issues in assessing going concern, including providing certainty in an increasingly uncertain world and achieving global consistency.
• The chapter also discusses Key Audit Matters (KAMs) and their importance in addressing risks of material misstatement that most influenced the audit strategy.

Chapter 9: Reporting Financial Performance

• IFRS 18, issued by the IASB in April 2024 with an effective date of 1 January 2027, replaces IAS 1 without major changes. While the detailed content is not part of the 2025 syllabus, awareness of key changes is required.
• The new standard affects the presentation of the Statement of Profit or Loss and disclosure of income and expenses, introducing new categories and subtotals.
• IFRS 18 also provides guidance on management-defined performance measures (MPMs) and the grouping of information in financial statements.

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