e International Auditing and Assurance Standards Board (IAASB) Data Analytics Working Group is pleased to announce the members of the recently-established Data Analytics Project Advisory Panel.
This Advisory Panel was established to inform the IAASB’s work on data analytics by:
advising the Working Group (and other IAASB task forces/working groups as necessary) on the developments in data analytics’ use in audit, thereby further informing the IAASB’s thinking and approach to its standard-setting activities;
serving as a technical resource to the IAASB and Working Group and providing an external perspective on the use of data analytics in a financial statement audit;
acting as a sounding board for the Working Group in Request for Input feedback considerations and when exploring the potential way forward, including implications and timing; and
providing input to any guidance or materials the IAASB may develop.
In connection with the establishment of the Working Group and its technology focus, the IAASB released a Request for Input, Exploring the Growing Use of Technology in the Audit, with a Focus on Data Analytics,in September 2016. It provides insights into data analytics’ opportunities and challenges and outlines the Working Group’s insights to date.
Additional information and project updates are available on the IAASB’s project page.
In this video, IAASB Data Analytics Task Force Chair, Robert Dohrer, and Working Group Members Alan Young, Partner, EY, and Peter Eimers, Partner, PwC Netherlands, discuss matters related to the widespread use of data analytics in audit. These include:
enhances requirements for risk assessment procedures to include specific factors related to accounting estimates, namely complexity, judgment, and estimation uncertainty;
sets a more detailed expectation for the auditor’s response to identified risks related to accounting estimates, including augmenting the auditor’s application of professional skepticism; and
is scalable regardless of the size or sector of the business or audit firm.
Significant changes in how auditors evaluate accounting estimates and related disclosures have been proposed by the International Auditing and Assurance Standards Board (IAASB). The changes will require auditors to sharpen their focus on risks of material misstatements arising from accounting estimates, and to address those risks with more granular audit requirements.
“Accounting estimates are used in many financial statements—often they are complex, and require judgement or have estimation uncertainty. It is especially important that auditors are required to design and perform procedures to ensure estimates’ reliability,” said Prof. Arnold Schilder, IAASB Chairman. “The proposed standard will bring significant changes to many audits, but particularly to audits of financial institutions, such as banks and insurers, given the recent shift to accounting for expected credit losses.”
The proposed standard continues the evolution of audit to meet the challenges of an increasingly complex global economy. It was developed following extensive consultation with regulators and practitioners, including those who audit small, medium, and large businesses.
The proposed standard:
enhances requirements for risk assessment procedures to include specific factors related to accounting estimates, namely complexity, judgment, and estimation uncertainty;
sets a more detailed expectation for the auditor’s response to identified risks, including augmenting the auditor’s application of professional skepticism; and
is scalable regardless of the size or sector of the business or audit firm.
About the IAASB The IAASB develops auditing and assurance standards and guidance for use by all professional accountants under a shared standard-setting process involving the Public Interest Oversight Board, which oversees the activities of the IAASB, and the IAASB Consultative Advisory Group, which provides public interest input into the development of the standards and guidance. The structures and processes that support the operations of the IAASB are facilitated by the International Federation of Accountants (IFAC). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org.
The Public Interest Oversight Board has approved an extension of Prof. Arnold Schilder’s term as Chairman of the International Auditing and Assurance Standards Board (IAASB) through 2018. This exceptional extension beyond Prof. Schilder’s normal term is due to the current review of potential enhancements to international standard-setting arrangements being undertaken by key stakeholders.
Since his initial appointment in 2009, Prof. Schilder has played a key role in guiding the IAASB as it strives to enhance the quality and consistency of auditing and assurance practices throughout the world. There are now 113 jurisdictions around the world using or in the process of adopting the clarified International Standards on Auditing.
"I am honored to have the opportunity to continue to lead the IAASB, particularly at this time,” said Prof. Schilder. “We are now in the midst of intense deliberations on changes to a number of fundamental standards underpinning high-quality audits, including those addressing accounting estimates, auditor risk assessments, group audits, and quality control. In addition, we are continuing our work on the implications of data analytics, professional skepticism, emerging forms of external reporting, and the needs of small- and medium-sized entities."
Prof. Schilder has brought a wealth of prior experience to his work on the IAASB. He was a member of the Managing Board of the Dutch Central Bank, responsible in particular for banking regulation and supervision. He has served as the chair of the Basel Committee on Banking Supervision's Accounting Task Force and was nominated by the Basel Committee to be a member of the Public Interest Oversight Board when it was first established. Earlier in his career he was president of Royal NIVRA (now Nederlandse Beroepsorganisatie van Accountants) and was an audit practitioner for nearly 26 years, serving small- and medium-sized entities and as an international audit partner. He also served as a part-time professor of auditing at the Universities of Amsterdam and Maastricht.
About the IAASB The IAASB develops auditing and assurance standards and guidance for use by all professional accountants under a shared standard-setting process involving the Public Interest Oversight Board, which oversees the activities of the IAASB, and the IAASB Consultative Advisory Group, which provides public interest input into the development of the standards and guidance. The structures and processes that support the operations of the IAASB are facilitated by the International Federation of Accountants (IFAC). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org.
