• IAASB Indicates Future Direction of Improved Auditor Reporting; Consults on Value, Viability, and Illustrative Report

    New York, New York English

    The International Auditing and Assurance Standards Board (IAASB) today released a key milestone consultation document in its work to enhance, on a global basis, the communicative value of the auditor’s report on financial statements. The IAASB’s Invitation to Comment: Improving the Auditor's Report sets out the indicative direction of the board’s future standard-setting proposals to improve how and what auditors report in accordance with International Standards on Auditing (ISAs).

    The Invitation to Comment (ITC) features a revised auditor’s report that illustrates the application of the IAASB’s suggested improvements. The ITC also provides the IAASB’s rationale for the suggested improvements, together with a discussion of their potential value and impediments, and in what areas feedback is sought. 

    “The global financial crisis has spurred users of audited financial statements to want to know more about individual audits and to gain further insights into the audited entity and its financial statements. While the auditor’s opinion is valued, many perceive that the auditor’s report could be more informative and shine light on key matters based on the auditor’s work. Change, therefore, is essential and the IAASB is strongly committed in the public interest to deliver meaningful improvements to auditor reporting as quickly as possible,” said Prof. Arnold Schilder, IAASB chairman.

    At the heart of the suggested improvements is the need for transparency on matters specific to the audited financial statements and the audit that was performed. A proposed new section in the auditor’s report, “Auditor Commentary,” is envisaged to be the mechanism by which auditors may call attention to matters that are, in the auditor’s judgment, likely to be most important to the users’ understanding of the audited financial statements or the audit. There are also suggested improvements with respect to new statements regarding going concern and other information in documents containing the audited financial statements, the description of the responsibilities of the auditor and key features of the audit itself, and enhancement to the format of the report.

    “The Consultative Advisory Group (CAG), which comprises over 30 member organizations and observers that are key stakeholders of the IAASB, is of the view that this is a very important project,” said Linda de Beer, IAASB CAG chairman. “All CAG member organizations, but in particular user groups and regulators, are of the view that the auditor’s report should point the reader to key aspects important for an understanding of the entity and its financial statements. Mandatory auditor commentary will go a long way to address this need of shareholders and others. The CAG responded very positively at its meeting in March 2012 to the aspects that the IAASB is addressing in the ITC.”

    Noted James Gunn, IAASB technical director, “The IAASB has heard – and indeed embraces – the call from stakeholders to re-examine and, to an extent re-invent, the auditor’s report. There is still much work to be done, and the IAASB will continue its deliberations in 2012 and 2013. However, it is critical that the IAASB hear from a wide range of stakeholders at this stage regarding the suggested improvements and whether they will achieve the value that users seek in order for the board’s future standard-setting proposals to develop in a way that will best serve the public interest.”

    The ITC includes planned dates for IAASB roundtables in the North American (September 10), European (September 14), and Asia Pacific (October 8) regions. The IAASB intends to finalize plans for these roundtables in the coming weeks, and will post them on its Auditor Reporting page.

    How to Comment
    The IAASB invites all stakeholders to respond to this ITC. To access the ITC and submit a comment, visit the IAASB’s website. Comments on the ITC are requested by October 8, 2012.

    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 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 167 members and associates in 127 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

     

     

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  • Improving the Auditor’s Report

    IAASB Invitation to Comment

    This Invitation to Comment (ITC) sets out the IAASB’s indicative direction proposed for the future auditor’s report. It features a revised auditor’s report that illustrates the application of the IAASB’s suggested improvements to auditor reporting. The ITC also provides the IAASB’s rationale for the suggested improvements, together with a discussion of their potential value and impediments, and in what areas feedback is sought.

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  • IAASB Releases New Global Standard on Assurance on Greenhouse Gas Statements

    New York, New York English

    The International Auditing and Assurance Standards Board (IAASB) today released new International Standard on Assurance Engagements (ISAE) 3410, Assurance Engagements on Greenhouse Gas (GHG) Statements. This new standard addresses an increasingly relevant global assurance service in support of reliable emissions reporting, whether for regulatory compliance purposes or undertaken on a voluntary basis to inform investors, consumers, and others. 

    “Today, there is clear and growing demand for companies to disclose their environmental impacts and initiatives and to report detailed emissions information, often through GHG statements. As this demand increases, public confidence in assured GHG emissions information becomes more significant, if not essential,” said Prof. Arnold Schilder, IAASB chairman. “In promulgating this new standard, the IAASB seeks to enhance the consistency and quality of assurance engagements on GHG information, recognizing the importance to the public interest of decisions being made on the basis of that information.”

    New ISAE 3410 addresses practitioners’ responsibilities in identifying, assessing, and responding to risks of material misstatement when engaged to report on GHG statements. It sets out requirements and guidance on the work effort and reporting responsibilities of practitioners for both reasonable and limited assurance engagements, as demand for both is increasingly evident in the marketplace. The ISAE is applicable to a broad range of situations, from emissions from electricity used at a single office, to emissions from complex physical or chemical processes at several facilities across a supply chain.  

    ”ISAE 3410 is a landmark standard in many respects,” noted James Gunn, IAASB technical director. “It responds to societal demands for standards that support quality in assurance services in areas other than financial reporting. It deals with engagements that largely need to be undertaken by a multidisciplinary team, where the assurance practitioner needs to integrate experts—in engineering or environmental science, for example—into various stages of the engagement. Notably, it also covers reporting for both reasonable and limited assurance engagements. It provides illustrative reports with features that distinguish for readers the difference between reasonable and limited assurance engagements, and shows how limited assurance reports may be further tailored to enhance users’ understanding of the assurance obtained.”

    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 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 167 members and associates in 127 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.


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    Acknowledges Importance of Public Confidence in Credibility of Emissions Reporting

  • IAASB 2012-2014 Strategy and Work Program Sets Auditor Reporting as Top Priority and Highlights Other Relevant Audit and Assurance Initiatives

    New York, New York English

    The International Auditing and Assurance Standards Board (IAASB) today released its Strategy and Work Program, 2012–2014. Developed through wide public consultation, it sets the direction and priorities for the IAASB’s activities over the next three years with a focus on:

    • Supporting global financial stability;
    • Enhancing the role, relevance, and quality of assurance and related services in today’s evolving world; and
    • Facilitating adoption and implementation of the IAASB’s standards.

    “Our forward strategy is to build on the strong base of standards that has been developed to date, to address new assurance topics, and to further promote the benefits of the International Standards on Auditing (ISAs) and our other international standards,” said Prof. Arnold Schilder, IAASB chairman. “The IAASB is constantly challenged to respond to growing demands from a diverse range of stakeholders in a continuously changing international environment. The areas addressed in our strategy are those we have heard to be the most important in the public interest, in particular our work on auditor reporting.”

    As the main priority for 2012–2014, the IAASB’s Strategy and Work Program identifies the enhancement of auditor reporting standards, a topic that the IAASB will again deliberate intensively at its June 2012 meeting in Edinburgh. The strategy is in keeping with the IAASB’s commitment to continue work on a number of its key initiatives related to audit quality, disclosures, review engagements, and assurance engagements, including assurance on greenhouse gas statements. In addition, the IAASB will continue to monitor the adoption and implementation of ISAs globally and focus on standards and initiatives relevant to small- and medium-sized entities. It will also explore appropriate actions stemming from the global financial crisis relating to banking and fair values.

    “Constructive dialogue and collaboration with others will be critical to identifying areas for innovation and improvement and to finding solutions to global issues, both now and in the future,” explained James Gunn, IAASB technical director. “The IAASB also recognizes its responsibility to identify matters within its mandate that have significant longer-term implications and to ensure that assurance and related services are relevant and responsive to the public interest, for example in emerging areas like integrated reporting. I am confident that the IAASB’s strategy and planned initiatives will assist it in fulfilling this responsibility.”

    For additional information on the IAASB’s current projects and the current project timetable, visit the IAASB’s project pages on its website.

    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 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 167 members and associates in 127 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

     

     

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  • IAASB Strategy and Work Program, 2012–2014

    This Strategy and Work Program sets the direction and priorities for the activities of the IAASB for the three-year period from January 2012 to December 2014, set within the stated objective and strategic initiatives of the IAASB’s Terms of Reference. It responds to significant developments in the environment in which audit, other assurance and related services are performed and in which standards for such services are set.

    IAASB
    English

  • IAASB Releases 2011 Annual Report - Foundations for the Future

    New York, New York English

    The International Auditing and Assurance Standards Board (IAASB) today released its 2011 Annual Report, Foundations for the Future.

    The annual report highlights the IAASB’s work in the public interest to strengthen audits globally and build robust standards for audit, assurance and related services, and its commitment to enhance the communicative value and relevance of auditor reporting.

    The report covers new and enhanced international standards issued by the IAASB, and draws attention to the IAASB’s new guidance material and implementation support.  It also spotlights IAASB’s continual outreach activities, efforts to maintain strong platforms for dialogue with stakeholders, and to promote the adoption and effective implementation of the clarified International Standards on Auditing (ISAs).

    “In 2011, the IAASB continued building on the clarified ISAs. It has explored many new and challenging auditing topics, from auditor reporting and financial statement disclosures to new pronouncements on auditing financial instruments and using the work of internal audit functions.  Our work has been propelled by the global financial crisis and the renewed importance of strong financial infrastructures to support financial stability,” said IAASB chairman Prof. Arnold Schilder. “Our efforts have also extended to new standards supporting other assurance and related services engagements, particularly those of relevance to practitioners serving the needs of smaller entities. I am pleased how proactive the board has been in helping to address a number of the important issues facing the profession and its many stakeholders today, while laying the foundation for further progress in the future,” added Schilder.

    The annual report details over 100 outreach activities undertaken during 2011, including liaisons with regulators and investor groups whose input is critical to the future of auditing. It includes a report from Prof. Linda de Beer, the chairman of the IAASB Consultative Advisory Group (CAG), which outlines the work of the CAG in providing input to the IAASB.

    The 2011 IAASB annual report can be downloaded at www.iaasb.org.

     
    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 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 167 members and associates in 127 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

     

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