02/2021 - Mercia updates and how to use new workpaper features

With the most recent changes to the Mercia methodology, there are a number of key points that you will need to be aware of going into preparing your files on MyWorkpapers. 

New folders 

With the focus on going concern and estimates there are now new folders and programmes as below: 

• QAE - Accounting estimates 
• R - Going Concern 
• S - Subsequent Events 

PF1-8 (adding B30X workpaper)

One of the major inclusions in the update is the B30X (X being (1), (2), (3) etc), described by Mercia as follows: 

New planning checklist designed to ensure compliance with the requirements of ISA (UK) 540 (Revised December 2018). A copy of this should be completed for each identified key accounting estimate.   

In the PF1-8 (Accounting Estimates) workpaper, an “Expected key accounting estimates” table has been added where the B30X workpaper is required for each Accounting Estimate. 

Once you have entered the "Nature of the key accounting estimate" and "Related disclosures" (optional) and click on the "Add Accounting Estimate" button, this information will be added to the table and a copy of the B30 workpaper will be created against the accounting estimate. The reference for the B30 workpaper will also be added to the table accordingly. 

The new B30X workpaper will sit within the B. Planning Folder in the Working Paper Index (WPI). 

The workpaper name will be the same as the nature of the accounting estimate. However, you can update the workpaper title as well as the reference from WPI.

Please note that the original B30 workpaper is set in the File's WPI as "Inactive". We would like to advise you not to edit or remove this workpaper as it will affect the copies of the workpapers created from the PF1-8 Accounting Estimate section.

B30X (Adding the Accounting estimate Audit Programmes (QAE))

In the B30X workpaper, one of the sections requires you to answer whether the key accounting estimate pose a significant risk of material misstatement. If your answer to this question is “Yes”, an Audit Programme will be required for the Accounting Estimate. 

To add an Audit Programme for your Accounting Estimate, simple click on the "Create workpaper" button. This will create a copy of the Accounting Estimates Audit Programme (QAE) and add its reference automatically to the procedure.

Note: If the accounting estimates do not pose a significant risk, the QAE workpaper is not required. 

The new QAE workpaper will sit within the QAE. Accounting Estimates Folder in the Working Paper Index (WPI). 

The workpaper name will be the same as the nature of the accounting estimate. However, you can update the workpaper title as well as the reference from WPI.

Audit Plan (B33 workpaper)

A new "Key Accounting Estimates" section has been added to the Audit Plan where the Accounting Estimates Programmes (QAE) will be displayed. 

From this section, you will be able to use the necessary space to add any information regarding the risks of the Accounting Estimate.   

S and R programmes 

As with the QAE programme above, in a lot of cases there will not be any lead schedules in the S and R sections. To get these to work on the Audit Plan you will need to add an open row against these programmes via Edit Mode which will give you the necessary space to add any data regarding risks and assessment of these programmes.  

This is also the case with the existing N1 Trial Balance programme.  

Disclosure checklists 

As at time of writing, the excel disclosure checklists have not yet been updated with the changes with this release. The word documents are however available.