Raymond Doherty 4 Feb 2019 04:09pm

KPMG includes Brexit warning in audits

In its audit reports the Big Four firm has started to caution clients that it can not “predict the unknowable factors” of Brexit

In its report on Anglian Home Improvements, KPMG stated that Brexit is “one of the most significant economic events for the UK”.

It added, “We applied a standardised firm-wide approach in response to that uncertainty when assessing the company’s future prospects and performance.

“No audit should be expected to predict the unknowable factors or all possible future implications for a company and this is particularly the case in relation to Brexit.”

There are now just over 50 days for a deal or an extension period on Article 50 to be agreed, or the UK will crash out of the EU with significant economic consequences.

A spokesperson for KPMG said that Brexit is now “widely accepted” as presenting a range of potential risks and uncertainties for most businesses.

“As a result, where we consider that our assessment of the potential impacts of Brexit on a company’s accounts would be of interest to investors, we provide an explanation of this, and any consequential additional audit work we have undertaken, in our audit report.

“In addition, where our assessment is that Brexit uncertainty affects a discrete area of the accounts, such as the impairment of goodwill or the going concern basis of accounting, a key audit matter relating to that area of the accounts would be included to highlight how we considered these uncertainties in our work,” they added.

Last week, KPMG said that the UK businesses it spoke to are “praying” for an Article 50 extension period.