The IAASB has responded to the Public Company Accounting Oversight Board's (PCAOB’s) initiative to explore ways to strengthen and modernize the PCAOB’s interim standards addressing the auditor’s use of the work of specialists.

The IAASB’s response draws reference to its work to develop ISA 620, Using the Work of an Auditor’s Expert, and ISA 500, Audit Evidence, as well as current projects on its agenda that are relevant to the topic of experts.

The International Auditing and Assurance Standards Board^® (IAASB^®) today released an Exposure Draft, Proposed Amendments to the IAASB’s International Standards—Responding to Non-Compliance or Suspected Non-Compliance with Laws and Regulations, to propose limited amendments to the IAASB’s International Standards in response to the International Ethics Standards Board for Accountants^® (IESBA’s^®) May 2015 Re-Exposure Draft, Responding to Non-Compliance with Laws and Regulations

“The IESBA’s Exposure Draft proposes a framework for professional accountants in deciding how best to act in the public interest when they come across an act or suspected act of non-compliance with laws and regulations, which will be highly relevant for auditors,” explained Prof. Arnold Schilder, IAASB Chairman. “The IAASB therefore believes that amendments are needed to the IAASB’s International Standards in the public interest to enable them to operate in concert with the IESBA standards and without confusion due to the many jurisdictions that utilize both.”  

The focus of the Exposure Draft is proposed amendments to International Standard on Auditing^TM (ISA^TM) 250, Consideration of Laws and Regulations in an Audit of Financial Statements, with less extensive changes proposed to seven other standards. The amendments, which are limited in nature, do not explicitly duplicate in detail all the specific requirements in the IESBA Code of Ethics for Professional Accountants^TM (the Code), as this allows for flexibility when ethical codes other than the Code are applied. Rather, the IAASB’s proposals seek to acknowledge the enhancements that will be made by the IESBA in the Code and clarify and emphasize key aspects of the IESBA’s proposals in the IAASB’s International Standards.

The IAASB’s Exposure Draft is open for comment through October 21, 2015, noted Kathleen Healy, IAASB Technical Director.

“The IAASB has issued its proposals with a 90-day comment period in hopes that stakeholders will consider them alongside the IESBA’s re-Exposure Draft,” she added. “The IAASB intends to continue to coordinate with the IESBA as both Boards move forward on this important topic.”

About the International Auditing and Assurance Standards Board (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).

About IFAC^®
IFAC is the global organization for the accountancy profession, dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. It is comprised of more than 175 members and associates in 130 countries and jurisdictions, representing approximately 2.8 million accountants in public practice, education, government service, industry, and commerce.

The Integrated Reporting Working Group of the International Auditing and Assurance Standards Board^® (IAASB^®) has released a publication, Exploring Assurance on Integrated Reporting and Other Emerging Developments in External Reporting, to inform stakeholders about the board’s ongoing work in this area.

The publication’s release coincides with the issuance of the International Integrated Reporting Council (IIRC)’s Overview of Feedback and Call for Action. The IAASB commends the IIRC for furthering the debate on assurance on integrated reporting, and has been actively engaged with the IIRC in events supporting its 2014 consultation.

“The IAASB is committed to ensuring that its standards address the stakeholders’ emerging needs for assurance services and has been monitoring demand for assurance on integrated reporting for some time,” said Prof. Arnold Schilder, IAASB Chairman. “The IIRC’s work to develop its International <IR> Framework and the feedback from its public consultation is invaluable to the IAASB as it continues to consider how best to respond in the public interest to integrated reporting and other emerging developments in external reporting.”

The IAASB’s Integrated Reporting Working Group was initially formed to monitor the demand for assurance engagements on integrated reporting. The focus of the Working Group includes initial thinking on the nature of such engagements, the scope of the subject matter information and the suitability of criteria, and other matters related to assurance, including the IAASB’s existing assurance standards.

“The IAASB has an open mind as to the way forward and recognizes that other emerging developments in external reporting are equally relevant to its considerations,” said Merran Kelsall, IAASB member and Integrated Reporting Working Group Chair. “The Working Group will continue to engage with stakeholders and facilitate the IAASB’s debates to inform the development of a Discussion Paper exploring assurance issues in greater depth, including how practitioners are innovating to meet the needs of investors and other preparers and users of external reporting.”

For more information and updates on the project, visit the IAASB’s project page at www.iaasb.org/auditing-assurance/projects/integrated-reporting-working-group

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).

About IFAC^®
IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of over 175 members and associates in 130 countries and jurisdictions, representing approximately 2.8 million accountants in public practice, education, government service, industry, and commerce.

The purpose of this publication, prepared by the Integrated Reporting Working Group, is to inform stakeholders about the IAASB’s ongoing work to explore assurance on integrated reporting and other emerging developments in external reporting.

It explains that the IAASB established the Integrated Reporting Working Group to inform the IAASB as to how and when to respond to these developments most effectively in the public interest, and outlines the group’s activities.

The International Auditing and Assurance Standards Board^® (IAASB^®) today released its revised International Standard on Auditing™ (ISA™), Addressing Disclosures in the Audit of Financial Statements. The revisions to the standards aim to focus auditors more explicitly on disclosures throughout the audit process and drive consistency in auditor behavior in applying the requirements of the ISAs.

As a complement to these revisions, IAASB staff has also developed a publication, Addressing Disclosures in the Audit of Financial Statements, for auditors that describes financial reporting disclosure trends and their possible implications from an audit perspective and highlights how the ISAs as revised guide the auditor in addressing disclosures. This publication is intended to help the consistent, effective, and proper application of the ISAs when addressing disclosures as part of an audit of financial statements, and may be particularly relevant to small and medium practices implementing the changes to the ISAs.

“Understandable and relevant disclosures are essential to users of financial statements, and the focus has shifted to providing more qualitative information in the disclosures,” noted Prof. Arnold Schilder, IAASB Chairman. “Increased auditor attention to disclosures is therefore in the public interest. We will continue to collaborate and coordinate with the accounting standards setters as they consider how to best improve financial statement disclosures and make them more effective.”

“Addressing the information included in disclosures is an integral part of the audit, regardless of the financial reporting framework under which the financial statements have been prepared,” explained Kathleen Healy, IAASB Technical Director. “The IAASB firmly believes these changes to the ISAs will enhance audit quality and are capable of being applied proportionately in audits of entities of all sizes, and in all jurisdictions and sectors.”

A staff-prepared Basis for Conclusions, which explains the IAASB’s rationale for its decisions, and an At a Glance document, which explains the main changes to the ISAs, are also now available.

The revisions to the standards encompass changes to 10 ISAs and conforming amendments to five other ISAs. They will be effective for audits of financial statements for periods ending on or after December 15, 2016, in line with the effective date for the new and revised Auditor Reporting standards and ISA 720 (Revised), The Auditor’s Responsibilities Relating to Other Information.

About the International Auditing and Assurance Standards Board
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).

About IFAC^®
IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of over 175 members and associates in 130 countries and jurisdictions, representing approximately 2.8 million accountants in public practice, education, government service, industry, and commerce.

Addressing Disclosures in the Audit of Financial Statements–Revised ISAs and Related Conforming Amendments aims at focusing auditors on disclosures throughout the financial statement audit.

IAASB Chairman Arnold Schilder was a featured speaker at the HLBI International Audit Conference in Amsterdam, the Netherlands. Prof. Schilder discussed key IAASB initiatives, including auditor reporting, enhancing audit quality, and the IAASB 2015-2016 work plan.