Implementation of the Clarified Standards

The clarified standards will introduce significant changes to audits. Both users of the current suite of ISAs and ISQC 1, and users of national standards based on these, will be affected, in addition to jurisdictions planning adoption of the new standards.

The level of effort that is needed for successful implementation should not be underestimated. It is, therefore, particularly important to take action at the earliest opportunity to deal with all aspects of implementation. This includes education, continuing professional development courses, and appropriate adjustments to current audit programs and procedures. Successful implementation of the clarified standards will depend upon the level of preparation when the new standards come into effect.

For an overview and guide to the resources that have been developed to support implementation of the clarified ISAs, click here.

Momentum of Adoption and Implementation Efforts

Some may find it helpful in their adoption and implementation efforts to understand adoption and implementation efforts in other jurisdictions. For this purpose, the following table identifies countries that use the clarified standards, or indicated that the clarified standards will be used in 2012 and beyond. The Basis for ISA Adoption by Jurisdiction chart, prepared by the IFAC Member Body Compliance Program, illustrates ISA adoption approaches that may be taken by these jurisdictions.

This table has been compiled as of April 30, 2012 from publicly available information about adoption status in different jurisdictions, and from information provided to IFAC Staff by national auditing standards setters. It is included for illustrative purposes only and may not be complete or up-to-date. Jurisdictionss that have adopted or plan to adopt the clarified standards who are not listed on this table are encouraged to inform IFAC of their adoption and implementation plans, including the timing of such plans, by emailing clarifiedISAs@ifac.org.

Jurisdictions That Use the Clarified Standards, or Indicated that the Clarified Standards Will Be Used in 2012 and Beyond

 * Abu Dhabi and Dubai 

** Private Companies

Updates

In October 2008, the staff of the IAASB issued a Clarity Project Update, which encourages all those with responsibilities relating to audits of financial statements to consider implementation issues as soon as practicable. It provides general considerations that may be relevant to:

• National standards setters, legislators, and others involved in setting standards;
• Regulators and oversight bodies;
• IFAC member bodies; and
• Accounting firms and audit practitioners

Staff Questions and Answers

In August 2009, the staff of the IAASB released a Questions & Answers publication, Applying ISAs Proportionately with the Size and Complexity of an Entity, to highlight how the design of the ISAs issued under the Clarity Project enables them to be applied in a manner proportionate with the size and complexity of an entity. The publication is relevant in the context of any audit, but will be of particular help to those who audit, or oversee the audits of, small- and medium-sized entities.

ISA Modules

IAASB staff has developed a series of ISA Modules focusing on some of the new and more significantly revised ISAs. 

Each module consists of a short video and slides that explain the key principles of, and major changes in, individual ISAs. This non-authoritative material is designed to be of assistance to auditors in the field, trainers, and those responsible for promoting adoption and implementation of the clarified ISAs.

Videos and slide presentations are available for the titles listed below:

ISA Modules Issued in 2010

• ISA 580, Written Representations
• ISA 620, Using the Work of an Auditor's Expert
• Materiality, Misstatements and Reporting - Part I 
• Materiality, Misstatements and Reporting - Part II
• Materiality, Misstatements and Reporting - Part III

ISA Modules Issued in 2009

• Introduction to the Clarity Project
• The Clarified ISAs, Audit Documentation, and SME Audit Considerations (ISA 200, Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with ISAs, and ISA 230, Audit Documentation)
• ISA 260, Communication with Those Charged with Governance
• ISA 265, Communicating Deficiencies in Internal Control to Those Charged with Governance and Managements
• ISA 540, Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures
• ISA 550, Related Parties
• ISA 600, Special Considerations - Auditors of Group Financial Statements (Including the Work of Component Auditors)

Permissions and Translations

For requests regarding translations of the videos, slides or supporting notes, or for transcripts of the videos for translation purposes, please email permissions@ifac.org.