The International Auditing and Assurance Standards Board (IAASB) today published its new Framework for Activities. The Framework describes the IAASB’s operating processes and procedures for advancing standard setting and other related activities.

The IAASB developed the Framework to support a more agile standard-setting process. The Framework also provides additional public transparency around the IAASB’s prioritization activities, beyond the formally approved due process. The Framework sets out the different components within the IAASB’s due process for advancing topics onto and through the IAASB’s work plan.

A new video on the suite of quality management standards is now available from the IAASB. It addresses considerations for firms when preparing to implement the standards, such as what may be retained from current systems, the time and resources needed, the impact on the firm as a whole, and various ways to approach implementation. The video emphasizes the need for firms to start early and prepare for implementation.

The IAASB suite of new and revised quality management standards was released in December 2020; they will become effective on December 15, 2022.

The International Auditing and Assurance Standards Board (IAASB) today published its Public Report detailing its progress to support the public interest between July 2019 and December 2020. During this 18-month period, the IAASB completed five major standards aimed at enhancing audit and assurance quality, adopted a four-year strategy focused on the public interest, and established a new work plan focused on emerging issues. The IAASB also responded to a new environment sparked by the global pandemic by issuing guidance and engaging with a broad range of stakeholders in order to sustain trust in audit and assurance.

The Public Report showcases the IAASB’s efforts to be a responsive, agile and innovative standard setter, closely connected with its stakeholders. The report highlights completed and in progress standard-setting projects, other new initiatives to respond to stakeholder needs, and our efforts to improve the agility of the standard-setting process. The report also includes reflections from IAASB Chair Tom Seidenstein on his first 18 months in this role.

Marking a significant step forward in supporting assurance for non-financial reporting, the International Auditing and Assurance Standards Board (IAASB) today published Non-Authoritative Guidance on Applying ISAE 3000 (Revised) to Extended External Reporting (EER) Assurance Engagements.

The Guidance responds to ten key stakeholder-identified challenges commonly encountered in applying International Standard on Assurance Engagements 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information. The guidance promotes consistent high-quality application of ISAE 3000 (Revised) in extended external reporting assurance engagements to:

• strengthen the influence of such engagements on the quality of extended external reporting;
• enhance trust in the resulting assurance reports; and
• increase the credibility of extended external reports so that they can be trusted and relied upon by their intended users.

“The IAASB is not a newcomer to assurance of what is commonly referred to as non-financial information reporting. For years, we have been active in this area as the landscape has continued to evolve,” according to IAASB Chair Tom Seidenstein. “Together with ISAE 3000 (Revised) and ISAE 3410, Assurance Engagements on Greenhouse Gas Statements, this guidance forms a strong package that will help enhance confidence in assurance reports and improve their reliability, including enabling practitioners to respond to new reporting regimes. We will continue to closely monitor current global developments to establish a coherent set of sustainability reporting standards, and are prepared to act to enhance our standards, frameworks and guidance to support progress.”

The Guidance addresses a number of overarching matters, including applying appropriate competence and capabilities, exercising professional skepticism and professional judgement, and the preconditions for an assurance engagement, as well as more specific technical matters. The Guidance also provides further explanation and examples to better understand the distinction between limited assurance and reasonable assurance engagements.

The IAASB expresses its sincere appreciation for the collaboration and funding provided by the World Business Council for Sustainable Development and the Gordon and Betty Moore Foundation.

Extended External Reporting
Extended external reporting encapsulates many different forms of reporting, including but not limited to, sustainability or environmental, social and governance (ESG) reporting, integrated reporting, reporting on corporate social responsibility, greenhouse gas statements, and service performance reporting in the public sector. These kinds of extended reporting are growing in frequency and importance, and address matters that are becoming increasingly critical to decision-making by investors and other users.

Additional Support Material
Two additional items of non-authoritative support material have also been published. These are not integral to the Guidance—the Guidance can be used without the need to refer to these materials but they are available as additional resources should practitioners wish to refer to them: (1) Credibility and Trust Model Relating to EER Reporting, and (2) Illustrative Examples of Selected Aspects of EER Assurance Engagements. The latter includes examples that cover a broad range of reporting frameworks.

About the IAASB
The International Auditing and Assurance Standards Board 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.

IFAC supports steps announced today by the IFRS Foundation in its ongoing consideration of whether to establish a new Sustainability Standards Board (SSB) alongside the IASB and under the existing governance structure of the IFRS Foundation. IFAC welcomes the engagement of IOSCO in this important initiative, as outlined in the IFRS Trustee statement as well as in IOSCO’s February 24 media release.

We agree with the Trustees’ strategic views that the new SSB should focus on information material to decisions of investors and other providers of capital and that the new board would initially focus its efforts on climate-related reporting, while also working toward meeting the information needs of investors on other ESG (environmental, social and governance) matters.

Likewise, we agree that a building blocks approach facilitates both the use of existing standards and frameworks (including TCFD) and the flexibility for coordination on reporting requirements that capture wider sustainability impacts, as IFAC articulated in its Way Forward roadmap.

IFAC CEO Kevin Dancey said, “IFAC continues to support the ongoing rationalization of a coherent global system. The IFRS Foundation is uniquely qualified and positioned to lead here, including engagement with existing sustainability-related initiatives and standard setters from key jurisdictions. IFAC looks forward to providing input to the forthcoming IFRS Foundation Constitution consultation and encourages our member bodies and stakeholders to take an active interest in these next steps.”

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 180 members and associates in 135 countries and jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.

The Technology Working Group of the International Auditing and Assurance Standards Board (IAASB) today released non-authoritative support material to help auditors address the risk of overreliance on technology, whether it arises from using automated tools and techniques or from using information produced by an entity’s systems.  

The publication does not amend or override the International Standards on Auditing (ISAs), the texts of which alone are authoritative. Reading the publication is not a substitute for reading the ISAs.

Together with ICAEW, The International Federation of Accountants (IFAC) today released the fifth installment in its Anti-Money Laundering: The Basics educational series: Installment 5: Tax Advice.  

The publication is part of a 6-month short series helping accountants enhance their understanding of how money laundering works, the risks they face, and what they can do to mitigate these risks and make a positive contribution to the public interest. Installment five examines tax advice and the multiple ways in which tax services may be vulnerable to money laundering.

The installment series, with its focus on accessibility and ease of use, will be a resource for Small and Medium Practices (SMPs,) and accountants less familiar with AML, while also providing guidance for those looking for a quick refresher or reference.

Anti-Money Laundering: The Basics is featured on both the IFAC (landing page) and ICAEW websites and available for download for free. To be globally relevant, the series uses the risk-based approach of the Financial Action Task Force (FATF) -- the global money laundering and terrorist financing watchdog -- as a starting point. 

For more information about IFAC, visit www.ifac.org.

For more information about ICAEW, visit https://www.icaew.com/.

The International Auditing and Assurance Standards Board (IAASB) is requesting public comments on its Exposure Draft addressing changes in some of its standards and framework resulting from the new and revised quality management standards. Comments are requested by May 24, 2021.

The Exposure Draft aligns the IAASB’s standards related to review, assurance and related services, as well as its framework, with the quality management standards through conforming amendments. This will ensure that the IAASB's international standards continue to be applied as intended. The proposed changes will also modify IAASB standards to reflect aspects of the new quality management approach and emphasize the importance of firm-level quality management to consistent quality engagements.

Please submit your comments via the IAASB website.

About the IAASB
The International Auditing and Assurance Standards Board 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 Monitoring Group (MG), the International Federation of Accountants (IFAC), and the Public Interest Oversight Board (PIOB) are pleased to announce the establishment of an Interim Nominating Committee to select the Chair of the International Ethics Standards Board for Accountants (IESBA) for the 2022-2024 term. This appointee will succeed Dr. Stavros B. Thomadakis, who has been the IESBA Chair since 2015.

The Interim Nominating Committee will be chaired by Mr. Makoto Sonoda, chair of IOSCO’s Committee on Issuer Accounting, Auditing and Disclosure, and will include Ms. Kathryn Byrne, Dr. Simon Longstaff, Sir David Tweedie, and Mr. Eddy Wymeersch. The Interim Nominating Committee meetings will be observed by MG representative, Jonathan Bravo of the IOSCO general secretariat, IFAC President, Alan Johnson and Chair of the PIOB, Linda de Beer.

By establishing an Interim[1] Nominating Committee for the selection of the next IESBA Chair, the MG has designed a nominating process based on the principles of the MG Recommendations published in July 2020.[2]  The next IESBA Chair will be nominated through an open call, appointed using a skills matrix that prioritizes the public interest and fosters a strategic mindset, and selected by a majority vote of the Interim Nominating Committee.

Sagar Teotia and Jean-Paul Servais, Co-Chairs of the MG stated: “The Chair of the IESBA plays a crucial role in ensuring that high quality ethics and independence standards and other pronouncements for professional accountants worldwide are developed in the public interest.  The new Chair will, amongst other key tasks, lead the strategic priorities of IESBA and its standard-setting agenda.  With the Interim Nominating Committee’s multi-stakeholder composition described above, we are confident this will contribute to a selection of the next IESBA Chair that is in the public interest.”

Alan Johnson, IFAC President stated: “Ethics and the public interest are the foundations on which the accountancy profession is built.  IFAC continues to support robust processes and strong governance in the selection of the standard setting board members and chairs. As such, we also strongly support the establishment of the Interim Nominating Committee, which further advances this important objective.”

Linda de Beer, PIOB Chair stated: “The PIOB very much welcomes the MG initiative to set up an independent nominating committee to select the next IESBA Chair. The prioritization of the public interest in the selection of this important role cannot be overstated, as the PIOB collaborates with stakeholders to strengthen public interest in international audit and ethics standard-setting.”

MEDIA ENQUIRIES

Mr. Jonathan Bravo
Email: j.bravo@iosco.org
Website: www.iosco.org/about/?subsection=monitoring_group

Ms. Jennifer DiClerico
Email: Jenniferdiclerico@ifac.org
Website: www.ifac.org

Ms. Rocio Goudie
Email: rgoudie@ipiob.org
Website: www.ipiob.org

IFAC welcomes today’s announcement from the IFRS Foundation Trustees to take further, timely steps to assess the possibility of establishing a new Sustainability Standards Board (SSB). We concur that there is “broad demand for the IFRS Foundation to play a role.” A Sustainability Standards Board is best positioned to lead the ongoing rationalization of a coherent global system for reporting requirements addressing enterprise value creation, sustainable development, and evolving stakeholder expectations. We agree with the Trustees’ conclusion that moving with urgency is a key factor for success. This can be accomplished by leveraging the expertise and standards that already exist as a result of the work by CDP, CDSB, GRI, IIRC, SASB, as well as the TCFD. For example, the recently released report on climate-related disclosure demonstrates the value of their continued collaboration to this global system.  

IFAC CEO Kevin Dancey, said “IFAC encourages our members and stakeholders to remain focused on this important initiative, to continue to engage in discussions and consultations that foster greater alignment and harmonization, and to offer their expertise to the establishment of this new Sustainability Standards Board and a global solution to the current fragmented reporting ecosystem.”

IFAC reiterates its support for this initiative, and stands ready to assist the Trustees as they move forward on this important work.

See IFAC's response to the IFRS Foundation's Consultation Paper on Sustainability Reporting and Enhanced Corporate Reporting: The Way Forward.