Kai Morten Hagen became a member of the IAASB in January 2019. He was nominated by the Nordic Federation of Public Accountants (NRF).
Mr. Hagen is currently Technical Director at the Norwegian Institute of public accountants (DnR). In this role, he supports the auditing standard setting board in Norway and is responsible for DnR’s work relating to audit and assurance matters.
Prior to joining the DnR, Mr. Hagen worked 12 years at Deloitte. His experience with Deloitte included audit and assurance engagements, national office activities relating to audit and assurance in Norway, and audit and assurance methodology project at the global office.
Mr. Hagen studied accounting and auditing at BI Norwegian Business School, and qualified as a state authorized public accountant in 2004.
The International Auditing and Assurance Standards Board (IAASB) seeks public comment by July 1, 2019 on three interrelated standards that address quality management. The proposals bring important changes to the way professional accountancy firms are expected to manage quality—for audits, reviews, and other assurance and related services engagements.
The proposed standards include a new proactive risk-based approach to effective quality management systems within firms that establish the foundation for consistent engagement quality. The new approach improves the scalability of the standards because it promotes a system tailored to the nature and circumstances of the firm and its engagements.
The IAASB proposals are intended to improve engagement quality through:
Modernizing the standards for an evolving and increasingly complex environment, including addressing the impact of technology, networks, and use of external service providers;
Increasing firm leadership responsibilities and accountability, and improving firm governance;
More rigorous monitoring of quality management systems and remediating deficiencies;
Enhancing the engagement partner’s responsibility for audit engagement leadership and audit quality; and
Addressing the robustness of engagement quality reviews, including engagement selection, documentation, and performance.
Given the significance of the changes and the need for firms to adjust how they manage quality, the IAASB has also developed draft guidance and tools, such as examples and frequently asked questions. These materials will help firms understand the proposals, including how to apply them in different circumstances.
Exposure Drafts
Overall Explanatory Memorandum, The IAASB’s Exposure Drafts for Quality Management at the Firm and Engagement Level, Including Engagement Quality Reviews
Proposed International Standard on Quality Management 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements (previously ISQC 1)
Proposed International Standard on Quality Management 2, Engagement Quality Reviews
Proposed International Standard on Auditing 220 (Revised), Quality Management for an Audit of Financial Statements
Comments on the Exposure Drafts are requested by July 1, 2019.
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
Proposed ISA 220 (Revised) will improve the management of quality at the engagement level for audits of financial statements. It contains enhanced and revised requirements and guidance to:
To ensure that engagement quality reviews continue to be robust and effectively support high-quality audits and other engagements, the IAASB has proposed various enhancements to engagement quality reviews. This includes a new proposed standard on engagement quality reviews that includes enhancements regarding:
Previously International Standard on Quality Control 1
To ensure that firms’ systems continue to be robust and effectively support high-quality audits and other engagements, the IAASB has proposed various enhancements to address firms’ systems of quality management, previously known as systems of quality control. This Exposure Draft includes a new proactive risk-based approach to an effective system of quality management that establishes the foundation for consistent engagement quality.
The IAASB is seeking public comment on three interrelated standards that address quality management. The proposals change the way professional accountancy firms are expected to manage quality—for audits, reviews, and other assurance and related services engagements.
This memorandum explains the significant issues common to the three exposure drafts. It also gives details about the proposed effective dates and implementation periods. This memorandum should be read in conjunction with the explanatory memorandums for each of the three proposed standards.
The evolving environment in which the International Auditing and Assurance Standards Board (IAASB) operates demands a strategy that reflects, among others, changing technology; a dynamic small- and medium-sized entity landscape; and emerging reporting needs. This is global stakeholders’ opportunity to shape the board’s strategy by commenting on the proposed draft.
In the Proposed Strategy for 2020–2023 and Work Plan for 2020–2021, the IAASB puts forth a way forward that it believes meets stakeholders’ evolving needs, and is in the public interest. Enhancing our processes, including using technology and appropriate resourcing, are included in the strategy and are crucial to success. These enhancements will also maximize the impact of our activities, thereby enabling more timely responses to global trends and needs.
The Work Plan highlights the board’s commitment to completing significant projects currently underway, while balancing the needs of different stakeholders.
Feedback on this consultation and on the IAASB’s strategic direction is requested by June 4, 2019 from all interested stakeholders.
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 IAASB seeks public comment by June 4, 2019 on its proposed Strategy for 2020–2023 and Work Plan for 2020–2021.
The evolving environment in which the IAASB operates demands a strategy that reflects, among other elements, changing technology; a dynamic small- and medium-sized entity landscape; and emerging reporting needs. This is global stakeholders’ opportunity to shape the board’s strategy by commenting on the proposed draft.
