The IAASB formalized the process by which it monitors developments in financial reporting standards, one goal of which is to provide the International Accounting Standards Board (IASB) with timely input on aspects of its proposed standards that may have potential verifiability or auditability issues. For this purpose, a working group consisting of IAASB members and technical advisors has been formed to monitor selected IASB projects.

The Public Interest Oversight Board (PIOB) has confirmed a number of new and reappointed members of the International Auditing and Assurance Standards Board (IAASB), an independent standard-setting board supported by the International Federation of Accountants (IFAC). The appointments were recommended by the IFAC Board and are effective January 1, 2011. The PIOB is an independent body that oversees IAASB activities.*

The new members of the IAASB are:

• Jean Blascos (France), a practitioner in a transnational firm;
• Jianshen Chen (China), a practitioner in a large national firm; and
• Merran Kelsall (Australia), a non-practitioner and chair of a national auditing standards setter.

The following members were reappointed for an additional term:

• John Archambault (United States), a practitioner in a transnational firm;
• Jon Grant (United Kingdom), a non-practitioner and staff member of a national audit regulator; and
• Caithlin McCabe (Australia), a practitioner in a transnational firm.

In addition, Diana Hillier was reappointed as deputy chair of the IAASB.

These six new and re-appointed members will work alongside the chairman, Prof. Arnold Schilder, the deputy chair, and the other 10 board members in setting high-quality auditing and assurance standards. In addition to standard setting, the IAASB strives to enhance the quality and uniformity of audit practice throughout the world by promoting the adoption and implementation of its International Standards on Auditing (ISAs).

“These new members are excellent choices for the IAASB,” said IFAC Chief Executive Officer Ian Ball. “In addition to being highly qualified individuals, their appointments maintain the balance of nine practitioners and nine non-practitioners on the board. The appointments also enhance the diversity of the board in terms of gender, regional, and professional balance.”

For more information about the work of the IAASB, visit its homepage at www.iaasb.org.

* Note to Editors
The Public Interest Oversight Board (PIOB) was formally established in February 2005 to oversee IFAC's auditing and assurance, ethics, and education standard-setting activities as well as the IFAC Member Body Compliance Program. The objective of the PIOB is to increase confidence of investors and others that such activities, including the setting of standards by the IAASB, are properly responsive to the public interest. PIOB members are nominated by international institutions and regulatory bodies.

About the IAASB
The IAASB (www.iaasb.org) 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 (www.ifac.org) 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 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

The International Auditing and Assurance Standards Board (IAASB) welcomes the issuance of the South African Declaration on International Standards of Supreme Audit Institutions (ISSAIs) (the Declaration), resulting from the 20th INCOSAI, the triennial Congress of the International Organization of Supreme Audit Institutions (INTOSAI). Held in Johannesburg last month, the Congress brought together about 500 delegates representing public sector interests.

Part of the Johannesburg Accords summarizing the results of the Congress, the Declaration represents INTOSAI’s endorsement of a framework comprised of a comprehensive set of ISSAIs and INTOSAI guidance on good governance (INTOSAI GOVs). The ISSAIs and INTOSAI GOVs provide guidance to public sector auditors responsible for financial audit, performance audit, and compliance audit, and also address transparency and accountability, quality control, peer review, and internal audit. The Declaration also calls upon INTOSAI members to use the ISSAI framework as a common frame of reference for public sector auditing by implementing the ISSAIs in accordance with their mandate and national legislation and regulations.

This important milestone for INTOSAI is particularly relevant to the IAASB, because the ISSAIs for financial audits include the clarified International Standards on Auditing (ISAs), as issued by the IAASB, along with supplemental guidance referred to as Practice Notes for each of the 36 clarified ISAs, as developed by INTOSAI’s Financial Audit Subcommittee of the Professional Standards Committee (PSC). The IAASB has observer status at INTOSAI’s PSC meetings and assisted in the development of the Practice Notes.

“The IAASB strongly believes that the ISAs are right for the public sector, and commends INTOSAI’s work to ensure that public sector auditors have the guidance they need to apply the ISAs in their financial audits,” said Prof. Arnold Schilder, chairman of the IAASB. “Much like the completion of the IAASB’s Clarity Project,* the finalization of the ISSAIs represents a significant achievement, and the adoption and implementation of the ISSAIs will contribute to enhanced quality in public sector auditing.”

For more than six years, the IAASB and INTOSAI have maintained a mutually beneficial relationship. In addition to the IAASB’s participation in the PSC, INTOSAI is represented on the IAASB, and INTOSAI experts serve on IAASB task forces as appropriate to provide public sector input into the development of the IAASB’s ISAs. Noted Jim Sylph, IFAC’s executive director, professional standards, “Our partnership with INTOSAI enables us to incorporate public sector input into the development of our ISAs, and we look forward to continuing this relationship as both of our organizations promote the adoption of a single set of standards for financial audits.”

*The Clarity Project, completed by the IAASB in March 2009, resulted in the issuance of 36 ISAs and one International Standard on Quality Control in a new style that is easier to understand, translate, and implement. Approximately half of the ISAs also contain substantive new requirements intended to improve practice in a variety of respects. The new set of clarified ISAs is now in effect for 2010 year-end audits.

About the IAASB
The IAASB (www.iaasb.org) 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 (www.ifac.org) 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 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

About INTOSAI
INTOSAI (www.intosai.org) operates as an umbrella organization for the external government audit community. For more than 50 years it has provided an institutionalized framework for supreme audit institutions to promote development and transfer of knowledge, improve government auditing worldwide and enhance professional capacities, standing and influence of member SAIs in their respective countries. At present, INTOSAI has 189 Full Members and 4 Associated Members.

The Chinese Auditing Standards Board (CASB) and the International Auditing and Assurance Standards Board (IAASB) met today to discuss convergence of international standards.

“As the largest developing country in the world, China firmly supports the efforts of the International Federation of Accountants (IFAC) and the IAASB to promote international convergence of auditing standards,” stated Dr. Wang Jun, Vice Minister of the Chinese Ministry of Finance and Chairman of the CASB. “The fundamental principle of drafting the Chinese auditing standards is to continuously improve them, as well as achieve continuous and comprehensive convergence with international auditing standards in line with the development of Chinese market economy and the overall trend of economic globalization and international convergence.”

“International convergence of auditing standards—the importance of which has been further manifested during the global financial crisis—is a strategic objective for the IAASB and IFAC,” stated IAASB Chairman Prof. Arnold Schilder. “We applaud the great efforts and the enormous progress that China is making toward international convergence. The Chinese government and the Chinese accountancy profession made the decision to converge and moved rapidly to give effect to that decision. We hope this serves as a model for developing countries and countries with economies in transition.”

Previously, the parties had signed a milestone joint statement in December 2005, which pointed out that establishing and improving a single set of high-quality global auditing standards is a logical response to the trend of economic globalization. It also acknowledged the key role these standards play in reducing the risk of decision-making by investors for efficient capital allocation, as well as in promoting economic development and maintaining financial stability all over the world.

In recent years, the IAASB has conducted the Clarity Project to enhance the clarity of International Standards on Auditing (ISAs), which involved the application of new drafting conventions to all ISAs and substantial revisions of a number of ISAs. On February 27, 2009, the Clarity Project reached its completion with the approval of the Public Interest Oversight Board (PIOB). Auditors worldwide now have access to 36 newly updated and clarified ISAs and a clarified International Standard on Quality Control (ISQC).

In accordance with the principle of continuous and comprehensive convergence, the CASB has completed the revision of Chinese Standards of Audit (CSAs), and achieved full convergence with the clarified ISAs. The revised CSAs were officially released in early November 2010, and are effective for audits of financial statements for periods beginning on or after January 1, 2011. During the process of international convergence, the CASB made limited additions it considered necessary and maintained some standards dealing with matters that are not specially covered in ISAs to reflect China’s unique circumstances and business requirements, such as standards for the verification of capital contributions and communication between predecessor and successor auditors. The IAASB recognizes that such additional requirements may be necessary and are acceptable where they do not conflict with ISAs.

About the CASB and the CICPA
As a specialized board under the Chinese Institute of Certified Public Accountants (CICPA), the CASB is responsible for developing CPA practice standards. Founded in 1988, the CICPA, in line with relevant laws and regulations, exercises the function of, among others, providing services to its members, monitoring service quality and professional ethics of members, regulating the CPA profession and coordinating the relationship within and beyond the CPA profession. The CICPA has more than 7,800 group members and over 170,000 individual members. The CICPA became a member of IFAC in 1997.

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 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

Video presentation (approx 9 min)

Video presentation (approx 11 min)

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Video presentation (approx 21 min)

Video presentation (approx 14 min)

The International Auditing and Assurance Standards Board (IAASB) today released a progress report on its project to monitor the implementation of its clarified ISAs. The report—Implementation of the Clarified International Standards on Auditing (ISAs)—highlights key findings from the first phase of the IAASB’s initiative to develop a process for gathering information to help it evaluate the effective and consistent implementation of the clarified ISAs. Following completion of the Clarity Project,* the first phase of this IAASB initiative has focused on learning more about early implementation experiences.

“Effective implementation is key to realizing the full benefits of the clarified ISAs,” said Prof. Arnold Schilder, Chairman of the IAASB. “With extensive implementation efforts now underway around the world, it is important for the IAASB to obtain timely feedback on the clarified ISAs from a variety of key stakeholders. The information we gather from this first phase and subsequent efforts of our monitoring project will help the IAASB continue to meet its objective of developing high-quality ISAs.

To promote awareness and understanding of the clarified ISAs, the IAASB also has released a second series of ISA modules,** focusing on some of the new and more significantly revised ISAs. These modules cover ISAs that address materiality in planning and performing an audit of financial statements, the evaluation of identified misstatements, written representations, using the work of an auditor’s expert, and auditor reporting.

As further support for ISA implementation, IAASB staff has released Auditor Considerations Regarding Significant Unusual or Highly Complex Transactions, a questions-and-answers (Q&A) publication. The Q&A highlights considerations in the ISAs that are relevant to auditing such transactions, often an area that gives rise to risks of material misstatement of the financial statements.

“These new resources will assist people responsible for adopting and implementing the clarified ISAs and, in particular, auditors as they prepare for the upcoming audit season,” explained IAASB Technical Director James Gunn. He added, “This additional support underscores the IAASB’s commitment to facilitating effective implementation of the ISAs and, ultimately, to enhancing audit quality.”

The new ISA modules are available to download free of charge from the IAASB Clarity Center on the IAASB’s website (www.iaasb.org/clarity-center). The IAASB encourages IFAC members, associates, regional accountancy bodies, and firms to use these materials and to promote their availability to their members and employees.

About the IAASB
The IAASB (www.iaasb.org) 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 (www.ifac.org) 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 159 members and associates in 124 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

Notes to Editor:

* The Clarity Project, completed by the IAASB in March 2009, resulted in the issuance of 36 ISAs and one International Standard on Quality Control in a new style that is easier to understand, translate, and implement. Approximately half of the ISAs also contain substantive new requirements intended to improve practice in a variety of respects. The new set of clarified ISAs is now in effect for 2010 year-end audits.

** Developed by IAASB staff, each of the ISA modules combines short video presentations, accompanying slides, and supporting notes that explain the key principles of, and major changes in, individual ISAs.