The FRC has issued a consultation on the proposed update of the guidance to auditors on the audit of financial instruments; an update to Practice Note 23 (Revised).

The proposed update reflects both the clarified International Standards on Auditing (ISAs) (UK and Ireland) and updated guidance issued by the International Auditing and Assurance Standards Board (IAASB) in its International Auditing Practice Note (IAPN) 1000, Special Considerations in Auditing Financial Instruments.

The FRC has supplemented IAPN 1000 with guidance that is currently set out in Practice Note 23 (Revised) that is still believed relevant and with a small amount of new guidance in relation to matters not covered in either IAPN 1000 or Practice Note 23 (Revised).

Nick Land, FRC board member and chairman of the Audit and Assurance Council said: 'The proposed updated guidance is intended to be relevant to audits of entities of all sizes that may be subject to the risks associated with using financial instruments. The guidance reflects lessons learnt in the financial crisis. The FRC invites comments from auditors and other stakeholders with an interest in audit.'

The closing date for comments is 4 January 2013.