Audit Method: Accounting for BREXIT

Auditors should consider the implications of BREXIT? The  EU referendum is carried out today and tomorrow by 9:00 AM Greenwich time we should be able to know the preliminary results.

Lets think about fictional accounting standard "Brexit accounting". We, auditors, have clients who work both in UK and EU and would like to know impact of Brexit outcome. 

I would consider following topics in this standard:

• Accounting for uncertainties;
• Disclosure and recognition of contingent assets;
• Disclosure and recognition of contingent liabilities;
• Disclosure of business risks related with change of UK status in EU

Some questions

• do we need to calculate long term provisions for employment termination  for EU employees from outside UK;
• discontinued operations: is there risk for the business to do that in case Brexit legislation would be enacted
• disclosure of future development in the strategic reports of companies who would benefit from Brexit

Some articles on the topic

EY helps boards to prepare:

http://www.ey.com/Publication/vwLUAssets/ey-helping-boards-assess-and-prepare-for-the-uk-referendum-on-eu-membership/$FILE/ey-helping-boards-assess-and-prepare-for-the-uk-referendum-on-eu-membership.pdf

Careers:

http://www.careersinaudit.com/article/how-will-brexit-affect-auditors-/

PWC involvement:

http://news.sky.com/story/1640482/accounting-giant-pwc-kicks-off-brexit-debate

Tax matters:

http://www.accountancyage.com/2016/04/13/would-brexit-mean-the-end-of-vat-in-the-uk/

Boards readiness:

https://iia.org.uk/media-centre/news/ftse-250-boards-finding-possible-brexit-planning-challenging/