PSAA consulted on and confirmed auditor appointments from 2023/24 to opted-in bodies in the period October to December 2022, following award of contracts to audit firms in August and September. The exercise covered all bodies that had opted in before 31 December 2022.
The process for making these appointments is explained below.
Developing proposals
In order for an audit firm to be eligible to tender for an audit contract with PSAA, the firm must appear on the ICAEW’s register of Local Auditors, having fulfilled the criteria determined by legislation as evaluated by the ICAEW (The Recognised Supervisor Body). Contracts were awarded after a competitive tender which weighted quality at 80% and price at 20%. The tender evaluation process assessed firms on their ability to deliver the contract.
For each firm awarded an audit contract with PSAA (6 firms in total), we put together a portfolio of proposed appointments that considered the following criteria amongst any other relevant factors.
Clause 13 of our contract terms is clear that the proposed appointment of a supplier to an audited body is a decision made by PSAA following consultation with (but for the avoidance of doubt not requiring the agreement or approval of) the supplier.
Criteria
- Threat to independence / conflict of interest between the supplier and audited body (principal consideration)
- Obligations owed to the supplier under this contract in relation to contract value
- Requests for the same auditor appointment as other bodies due to partnership or collaboration working that may impact on audit responsibilities
- Supplier desirability to be appointed to a blend and mixture of body types
- Location of supplier’s principal offices, any specified geographical preferences and location of audited body principal office
- Status of the prior years’ audits at an audit body
- Continuity of auditor having regard to Guidance and the Terms of Appointment
- Other factors
- seeking to avoid appointing a supplier to an audit that it has relinquished in the current appointing period;
- the potential to increase the number of suppliers that provide services in those areas with a dominant supplier;
- where in our view a fresh pair of eyes may be beneficial to the audit; and
- any audits covered by a current contract that we intend to extend.
Consulting audited bodies
We consulted audited bodies on proposed appointments from 17 October 2022, allowing four weeks for the consultation.
Where a body accepted the appointment we proposed, no further action was needed pending confirmation of the appointment once approved formally by the PSAA Board in December 2022.
We recognised that in some instances there could be valid reasons why the proposed firm may not be appointed. Opted-in bodies therefore had the opportunity to make representations about the firm we had proposed to appoint.
Representations were considered carefully and a formal response made in each case, whether accepted or rejected. Where representations were accepted, we consulted on a revised appointment proposal.
Finalising and confirming appointments
The PSAA Board approved the proposed appointments from 2023/24, following consultation with audited bodies, at its meeting on 16 December 2022. The Board’s decision on the appointment of auditors is final. We wrote to each opted-in body on 19 December 2022 to confirm their auditor appointment.