The Financial Reporting Council (FRC) issued a proposed revised version of its practice note 14 on 'The Audit of Housing Associations in the United Kingdom'.

The proposed practice note reflects changes to the environment in which housing associations operate and concern issues such as pressures on public expenditure which have led to welfare reforms and lower grant funding and revenue support for associations; changes in the pattern of financing which have resulted in a migration away from bank debt to the bond market; and various pressures on housing associations to diversify from not for profit to commercial operations and into more complex corporate structures.

The practice note also considers regulatory developments, including where regulators assess associations' financial viability, which are likely to be a useful source of audit evidence.

Nick Land, FRC board member and chairman of its Audit and Assurance Council said: 'UK Housing Associations provide some three million homes and have attracted in excess of £50bn in bank and capital finance. This economically important sector of the UK economy has its own particular business and audit risks which auditors need to be aware of and respond to, when undertaking engagements in the sector.'

The exposure draft can be downloaded from the FRC website

Responses to the consultation paper should be emailed to Steve Leonard at the FRC by Friday 25 October 2013.