Clarity of IAASB Standards - Completed
John Kellas, Chair
Denise Esdon, Member
John Fogarty, Member
Jon Grant, Member
Gerard Tremoliere, Member
Objective(s) of project
The objective of this project is to improve the clarity of International Standards on Auditing (ISAs).
The scope of the project includes:
- Establishing the conventions to be used by the IAASB in drafting future ISAs, and the obligations of auditors who follow those Standards.
- Applying those conventions to all of the ISAs, either as part of the substantive revision of an ISA or limited redrafting to reflect only the conventions and matters of clarity generally.
In serving the public interest, the IAASB aims to set high quality international auditing and assurance standards that are understandable, clear and capable of consistent application, thereby serving to enhance the quality and uniformity of practice worldwide.
In seeking continually to improve its standards, the IAASB undertook in 2003 to review the drafting conventions used in its International Standards. The objective of the review was to identify ways to improve the clarity, and thereby the consistent application, of International Standards issued by the IAASB.
Task Force progress / Board discussions to date
In 2006, the IAASB approved amendments to the Preface to the International Standards on Quality Control, Auditing, Review, Other Assurance and Related Services (Preface). The amended Preface establishes the conventions to be used by the IAASB in drafting future ISAs, and the obligations of auditors who follow those Standards.
In 2006, the IAASB also approved the application of those conventions to the following ISAs:
- ISA 240 (Redrafted), The Auditor's Responsibilities Relating to Fraud in an Audit of Financial Statements*
- ISA 300 (Redrafted), Planning an Audit of Financial Statements*
- ISA 315 (Redrafted), Identifying and Assessing the Risks of Material Misstatement Through Understanding the Entity and Its Environment*
- ISA 330 (Redrafted), The Auditor's Responses to Assessed Risks*
The IAASB staff-prepared document, Basis for Conclusions: Clarity summarizes the more significant issues raised by respondents to the proposed amended Preface and the four redrafted ISAs, and how the IAASB addressed them.
The amended Preface contains important statements about the authority of the International Standards issued by the IAASB. The IAASB understands that the amended Preface may not be reproduced or adopted in certain jurisdictions. Accordingly, the IAASB has incorporated the provisions of the amended Preface related to ISAs in ISA 200 (Revised and Redrafted), Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with International Standards on Auditing. This ISA was approved by the IAASB in June 2008 and will be released as a final pronouncement after the Public Interest Oversight Board (PIOB) has confirmed that due process was followed in its development.
In addition to the above, and the projects to revise extant ISAs (which are listed separately under Recently Completed Projects), the IAASB has approved the following final redrafted ISAs and exposure drafts of proposed redrafted ISAs:
Final redrafted ISAs
- ISA 210 (Redrafted), Agreeing the Terms of Audit Engagements*
- ISA 220 (Redrafted), Quality Control for an Audit of Financial Statements*
- ISA 230 (Redrafted), Audit Documentation*
- ISA 250 (Redrafted), Consideration of Laws and Regulations in an Audit of Financial Statements*
- ISA 500 (Redrafted), Considering the Relevance and Reliability of Audit Evidence*
- ISA 501 (Redrafted), Audit Evidence Regarding Specific Financial Statement Account Balances and Disclosures*
- ISA 510 (Redrafted), Initial Audit Engagements - Opening Balances*
- ISA 520 (Redrafted), Analytical Procedures*
- ISA 530 (Redrafted), Audit Sampling*
- ISA 560 (Redrafted), Subsequent Events*
- ISA 570 (Redrafted), Going Concern*
- ISA 610 (Redrafted), Using the Work of Internal Auditors*
- ISA 700 (Redrafted), The Independent Auditor's Report on General Purpose Financial Statements*
- ISA 710 (Redrafted), Comparative Information - Corresponding Figures and Comparative Financial Statements*
- ISA 720 (Redrafted), The Auditor's Responsibility in Relation to Other Information in Documents Containing Audited Financial Statement.*
Final redrafted ISQC
- ISQC 1 (Redrafted), Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements*
* See the Clarified Standards page.
The IAASB completed its Clarity project at the end of 2008.
The IAASB has determined that all of its clarified standards are to be effective for audits of financial statements for periods beginning on or after December 15, 2009.
For additional information about the Clarity project, please see the following updates prepared by the IAASB staff:
- In January 2007 the document, Status of the IAASB's Work to Improve the Clarity of Its Standards, which describes the main changes to the IAASB's standards arising from the application of its clarity drafting conventions and explains the IAASB's approach to implementing the conventions to all ISAs; and
- In October 2007 the document, Effective Date for IAASB's Clarified International Standards on Auditing, which provides the rationale for the effective date and implementation considerations.
- In October 2008 the document, Clarity Project Update , which provides a progress update on the Clarity project to help those with responsibilities relating to audits of financial statements set in motion plans to ensure that audits are effectively carried out under the clarified ISAs when the standards come into effect.