Ofcom Investigating RMs provision of Audit Opinions

[TrueBlueTerrier]

Own-initiative investigation into Royal Mail plc (“Royal Mail”) concerning compliance with USP Accounting Conditions 1.3.4, 1.4.4 and 1.5.5 and the Regulatory Accounting Guidelines regarding the provision of Audit Opinions

http://stakeholders.ofcom.org.uk/enforc ... n=cw_01169" onclick="window.open(this.href);return false;

Complainant: Ofcom own-initiative investigation
Investigation against: Royal Mail
Case Opened: 4 November 2015
Issue: Whether Royal Mail has complied with its obligations under USP Accounting Condition (“USPAC”) 1.3.4, 1.4.4 and 1.5.5 and the Regulatory Accounting Guidelines (“RAG”) to secure an appropriate audit opinion in respect of the relevant regulatory financial statements for the years 2013/14 and 2014/15.
Relevant Instrument: USPAC 1.3.4, 1.4.4 and 1.5.5 and the RAG

Ofcom has opened this investigation following assessment of evidence regarding whether Royal Mail has provided audit opinions in the required form for the years 2013/14 and 2014/15.

USPAC 1.3.4, 1.4.4 and 1.5.5 require Royal Mail to secure an appropriate audit opinion by a Qualified Independent Auditor in respect of certain regulatory financial statements and information on the basis directed by Ofcom from time to time. The nature of the assurance required for the purposes of these audit opinions is set out in Section 10 of the RAG.

On 27 January 2014 we published a statutory notification entitled ‘Updating the Regulatory Reporting Framework – Statutory Notification – USP accounting condition’ (the “Notification”) which changed the form required for the relevant audit opinions, as described in the RAG. Specifically, the definition of ‘PPIA’ as set out in the RAG was updated to clarify that the audit opinion has to be “Properly Prepared in Accordance with these Guidelines and the Guiding Principles set out under USPAC 1.7.2” (the underlined text highlights the amendment made to the wording).

Ofcom’s investigation will examine whether there are reasonable grounds for believing that Royal Mail has failed to comply with its obligations under USPAC 1.3.4, 1.4.4 and 1.5.5 and the RAG in respect of the audit opinions it provided for the years 2013/14 and 2014/15 following the changes introduced when the Notification came into effect.

Case Leader: Kathryn Searle (Kathryn.Searle@ofcom.org.uk)
Case Reference: CW/01169/11/15