International Auditing and Assurance Standards Board
The International Auditing and Assurance Standards Board (IAASB) is an independent standard-setting body that serves the public interest by setting high-quality international standards for auditing, quality control, review, other assurance, and related services, and by facilitating the convergence of international and national standards. In doing so, the IAASB enhances the quality and uniformity of practice throughout the world and strengthens public confidence in the global auditing and assurance profession.
The IAASB’s Strategy for 2015-2019 and the IAASB Work Plan for 2015-2016 set the direction and priorities for its activities. The IAASB’s efforts are focused on development, adoption and implementation of international standards addressing audit, quality control, review, other assurance, and related services engagements.
The IAASB’s medium-term strategy addresses the following three main themes in the public interest:
- Supporting global financial stability;
- Enhancing the role, relevance and quality of assurance and related services in an evolving world; and
- Facilitating adoption and implementation of the standards.
The IAASB follows a rigorous due process in developing its pronouncements. Input is obtained from a wide range of stakeholders including the IAASB's Consultative Advisory Group national auditing standard setters, IFAC member bodies and their members, regulatory and oversight bodies, firms, governmental agencies, investors, preparers, and the general public. Exposure Drafts of proposed pronouncements are posted on the website and comments are invited; final pronouncements are accompanied by a Basis for Conclusions with respect to comments received. The Public Interest Oversight Board (PIOB) oversees the work of the IAASB and its CAG to ensure that the activities of the IAASB follow due process and are responsive to the public interest.
The IAASB is dedicated to operating as transparently as possible. IAASB meetings are open to the public and meeting agendas, agenda papers, and meeting highlights are posted on the website. In addition, the website includes project histories, audio recordings of the IAASB meetings, IAASB Exposure Drafts and all comments made on those drafts by stakeholders.
- Willie Botha, Technical Director
- Tom Seidenstein, Chair
- James Gunn, Managing Director, Professional Standards
Tom Seidenstein, Chair*
Fiona Campbell, Deputy Chair*
The International Auditing and Assurance Standards Board (IAASB) was founded in March 1978. It was previously known as the International Auditing Practices Committee (IAPC).
The IAPC’s initial work focused on three areas: object and scope of audits of financial statements, engagement letters, and general auditing guidelines. In 1991, the IAPC’s guidelines were recodified as International Standards on Auditing (ISAs).
In 2001, a comprehensive review of the IAPC was undertaken, and in 2002, the IAPC was reconstituted as the International Auditing and Assurance Standards Board (IAASB). In 2003, IFAC approved a series of reforms designed, among other things, to further strengthen its standard-setting processes, including those of the IAASB, so that they are responsive to the public interest.
In 2004, the IAASB began the Clarity Project, a comprehensive program to enhance the clarity of its ISAs. This program involved the application of new conventions to all ISAs, either as part of a substantive revision or through a limited redrafting to reflect the new conventions and matters of clarity generally.
- Terms of Reference
The mission of the International Federation of Accountants (IFAC), as set out in its constitution, is “to serve the public interest by contributing to the development, adoption and implementation of high-quality international standards and guidance; contributing to the development of strong professional accountancy organizations and accounting firms, and to high quality practices by professional accountants; promoting the value of professional accountants worldwide; and speaking out on public interest issues where the accountancy profession’s expertise is most relevant.” In pursuing this mission, the IFAC Board has established the International Auditing and Assurance Standards Board (IAASB) to function as an independent standard-setting body under the auspices of IFAC and subject to the oversight of the Public Interest Oversight Board (PIOB).
The IAASB develops and issues, in the public interest and under its own authority, high-quality auditing and assurance standards and other pronouncements for use around the world. The IFAC Board has determined that designation of the IAASB as the responsible body, under its own authority and within its stated terms of reference, best serves the public interest in achieving this aspect of its mission.
The IAASB’s objective is to serve the public interest by setting high-quality auditing, assurance, and other related standards and by facilitating the convergence of international and national auditing and assurance standards, thereby enhancing the quality and consistency of practice throughout the world and strengthening public confidence in the global auditing and assurance profession.
In fulfilling the above objective, the IAASB develops and issues the following International Standards:
- International Standards on Auditing (ISAs) and International Standards on Review Engagements (ISREs) to be applied in audit and review engagements on historical financial information.
- International Standards on Assurance Engagements (ISAEs) to be applied in assurance engagements other than audits or reviews of historical financial information.
- International Standards on Related Services (ISRSs) to be applied in related services engagements.
- International Standards on Quality Control (ISQCs) to be applied for all services falling within the Engagement Standards of the IAASB.
The IAASB also publishes other pronouncements on auditing and assurance matters, thereby advancing public understanding of the roles and responsibility of professional auditors and assurance service providers.
The official text of the International Standards and other pronouncements is that published by the IAASB in the English language.
The members of the IAASB, including the Chair and Deputy Chair, are appointed by the IFAC Board on the recommendation of the Nominating Committee and with the approval of the PIOB. The appointment as Deputy Chair does not imply that the individual concerned is the Chair-elect.
The IAASB has 18 members comprising practitioners and non-practitioners, of whom no more than nine shall be practitioners and no less than three shall be public members. A public member is an individual who satisfies the requirements of a non-practitioner and is also expected to reflect, and is seen to reflect, the wider public interest. Not all non-practitioners are therefore eligible to be public members. The three public members may be members of IFAC Member Bodies.
The selection process is based on the principle of “the best person for the job,” the primary criterion being the individual qualities and abilities of the nominee in relation to the position for which they are being nominated. However, the selection process also seeks a balance between the personal and professional qualifications of a nominee and representational needs, including gender balance, of the IAASB. Accordingly, consideration will be given to other factors including geographic representation, sector of the accountancy profession, size of organization, and level of economic development.
IAASB members may be accompanied at meetings by a technical advisor. A technical advisor has the privilege of the floor with the consent of the IAASB member he or she advises, and may participate in projects. Technical advisors are expected to possess the technical skills to participate, as appropriate, in IAASB debates and attend IAASB meetings regularly to maintain an understanding of current issues relevant to their role.
The IAASB may also include up to three observers, appointed at the discretion of the IFAC Board, in consultation with the PIOB. Observers may attend IAASB meetings, have the privilege of the floor, and may participate in projects. Observers are expected to possess the technical skills to participate fully in IAASB debates and attend IAASB meetings regularly to maintain an understanding of current issues.
The Chair of the IAASB Consultative Advisory Group (CAG) is expected to attend IAASB meetings, or to appoint a representative of a CAG member organization to attend. The Chair of the IAASB CAG, or appointed representative, has the privilege of the floor at IAASB meetings.
IAASB members are required to sign an annual statement declaring they will act in the public interest and with integrity in discharging their roles within IFAC. Nominating organizations of members of the IAASB are asked to sign independence declarations.
5.0 The IAASB Chair
The IAASB Chair is an independently contracted position within IFAC. The Chair is selected by the Nominating Committee and recommended to the IFAC Board for its agreement and to the PIOB for subsequent approval. The provisions of the Chair’s remuneration, benefits and other conditions are determined in a separate contract between the Chair and IFAC.
The IAASB Chair must agree to be bound by independence requirements in order to assume the position. The independence requirements are outlined in The Independence Requirements of the IAASB Chair.
6.0 Terms of Office
The standard term for IAASB members is three years, with approximately one-third of the membership rotating each year. A member may serve up to two consecutive terms, for an aggregate term of six years.
The Chair ordinarily may serve three consecutive terms (as Chair or as a member for one to two terms preceding the appointment as Chair), for an aggregate of nine years. In exceptional circumstances, to be specified by the Nominating Committee, the Chair may serve for one additional consecutive term, for an aggregate term of twelve years.
7.0 Meeting Procedures
Each IAASB meeting requires the presence, in person or by simultaneous telecommunications link, of at least twelve appointed members.
IAASB meetings shall be chaired by the Chair or, in his/her absence, by the Deputy Chair. In the event of the absence of both, the members present shall select one of their number to take the chair for the duration of the meeting, or of the absence of the Chair and Deputy Chair.
Each member of the IAASB has one vote which can be exercised only by the appointed member. The affirmative vote of at least twelve of those present at a meeting in person or by simultaneous telecommunications link is required to approve or withdraw International Standards and to approve exposure drafts.
IAASB meetings to discuss the development, and to approve the issuance or withdrawal of International Standards, and to approve the issuance of exposure drafts and other pronouncements, are open to the public. Matters of a general administrative nature or with privacy implications may be dealt with in closed sessions of the IAASB; no decisions that would affect the content of the International Standards and other pronouncements issued by the IAASB are made in a closed session. Agenda papers for open sessions, including minutes of the meetings of the IAASB, are published on the IFAC website. The IAASB meetings and agenda papers are in English, which is the official working language of IFAC.
The PIOB has the right to attend, or be represented at, all meetings, including closed sessions, of the IAASB.
8.0 Due Process
The IAASB is required to be transparent in its activities, and in developing its International Standards, to adhere to due process as approved by the PIOB.
In setting its strategy and work program, the IAASB obtains the PIOB’s conclusion as to whether the due process used to develop the IAASB’s strategy and work program has been followed effectively and with proper regard for the public interest. The IAASB also obtains the PIOB’s opinion, as at the date of that opinion, on the appropriateness of the items on the work program, and its approval of the completeness of the strategy and work program from a public interest perspective. The IAASB adds to its work program those items that the PIOB resolves should, from a public interest perspective, form part of the IAASB’s work program.
9.0 Consultative Advisory Group
The objective of the IAASB CAG is to provide input to and assist the IAASB through consultation with the CAG member organizations and their representatives at the CAG meetings, in order to obtain: advice on the IAASB’s agenda and project timetable (work program), including project priorities; technical advice on projects; and advice on other matters of relevance to the activities of the IAASB.
The IAASB cooperates with national standard setters to link their work with IAASB’s own in preparing and issuing International Standards with an aim to share resources, minimize duplication of effort and reach consensus and convergence in standards at an early stage in their development. It also promotes the endorsement of the International Standards by national standard setters, legislators and securities exchanges and promotes debate with users, regulators and practitioners throughout the world to identify user needs for new International Standards and guidance.
The IAASB publishes an annual report, outlining its work program, activities and progress made in achieving its objectives during the year.
The IFAC Board will review the terms of reference of the IAASB at least every three years.
 A non-practitioner is a person who is not a member or employee of an audit practice firm and, in respect of individuals who have been members or employees of such firms, there shall normally be a cooling-off period of three years, but that such period may, on a comply or explain basis, be reduced, provided that such a reduction shall not result in a cooling-off period of less than one year. Where an individual is proposed for appointment with less than a three year cooling-off period IFAC shall provide to the PIOB the reasons for the proposed appointment, which the PIOB shall, in line with its authority to approve all appointments to the IAASB, have the authority to accept or decline.
 While these sentences reflect changes approved to membership in 2011, the transition to the changes in membership will commence in 2013.
- Annual Reports
- Steering Committee
The Steering Committee is a standing committee of the International Auditing and Assurance Standards Board (IAASB).
The Steering Committee’s objectives and responsibilities include:
- Establishing the IAASB’s, action plan, priorities, and related initiatives, in accordance with the terms of reference, for approval by the IAASB;
- Establishing and approving changes to the IAASB’s working procedures so that high-quality standards are developed and issued in the public interest in a transparent, efficient, and effective manner;
- Counseling and advising the IAASB Chair and Technical Director on matters and activities relating to achievement of the objectives of the IAASB;
- Formulating policies that facilitate and promote global acceptance of IAASB standards and international convergence; and
- Identifying and responding to significant developments in the environment and issues raised by key stakeholders.
The Steering Committee's objectives, responsibilities, composition, operating procedures, and membership are set below.
Terms of Reference and Operating Procedures
1. The International Auditing and Assurance Standards Board (IAASB) Steering Committee (Steering Committee) is a standing committee of the IAASB. The purpose of the Steering Committee is to formulate views and advise the IAASB on matters of strategic and operational importance to the IAASB, while also relieving the IAASB of the need to address certain administrative matters that do not necessarily require deliberation by the IAASB. In addition, the Steering Committee acts as counsel and advisor to the IAASB Chair and Technical Director on matters and activities relating to achievement of the objectives of the IAASB.
2. The Steering Committee reports to the IAASB.
3. The objectives of the Steering Committee are as follows:
- To identify and respond to strategic opportunities, threats and other developments in the environment in which assurance services are performed and in which standards for such services are set so that the work of the IAASB continues to be effective in protecting the public interest and strengthening public confidence in the accounting profession.
- To identify and respond to the need for change to IAASB’s working procedures and practices so that they continue to support the development of high quality standards in the public interest in a transparent, efficient and effective manner.
- To counsel and advise the IAASB Chair and Technical Director on matters and activities relating to achievement of the objectives of the IAASB.
4. To achieve its objectives, and after appropriate consultation with the IAASB as necessary, the Steering Committee:
- Establishes and, as necessary, revises the strategy, action plan and related initiatives of the IAASB in accordance with its stated terms of reference and within the context of the International Federation of Accountants’ (IFAC) overall strategy, for approval by the IAASB.
- Prioritizes the projects to be undertaken by the IAASB and approves new project proposals for recommendation for approval by the IAASB.
- Establishes and approves on behalf of the IAASB changes to the IAASB’s working procedures, as necessary, so that high quality standards are developed and issued in the public interest in a transparent, efficient and effective manner. This responsibility includes, amongst others, determining whether a public hearing should be held on a particular standard.
- Approves on behalf of IAASB an Annual Report outlining the IAASB work program, activities and progress made in achieving its objectives during the year.
- Addresses other matters at the request of the IFAC Public Interest Oversight Board (PIOB), the IAASB Consultative Advisory Group (CAG), or the IAASB.
5. The Steering Committee counsels, advises and supports the IAASB Chair and Technical Director in identifying and responding to other matters relating to achievement of the objectives of the IAASB. This responsibility includes, amongst others, supporting the IAASB Chair and Technical Director in:
- Establishing and maintaining liaison arrangements between the IAASB and national standard setters, regulators, the IFAC PIOB, the IAASB CAG and other organizations and stakeholders.
- Formulating policies that facilitate and promote global acceptance of IAASB standards and international convergence.
- Identifying and responding to significant developments in the environment, issues raised by key stakeholders and other pertinent matters.
- Approving changes, as necessary, relating to the publication of IAASB pronouncements.
6. The Steering Committee is chaired by the IAASB Chair.
7. The Steering Committee comprises four to six members of the IAASB and includes the IAASB Technical Director. Members of the Steering Committee are appointed by the IAASB Chair. The IAASB CAG may also appoint one of its members as an observer to the Steering Committee. Steering Committee members are not ordinarily accompanied at meetings by a technical advisor.
8. The Chair of the Steering Committee may invite other persons to attend Steering Committee meetings as observers (for example, the Chair of a task force may be invited if issues related to that project are to be discussed).
9. A member of the IAASB’s staff provides administrative and technical support to the Steering Committee.
10. The Chair of the Steering Committee acts as liaison between the Steering Committee and the IAASB and is responsible for reporting to the IAASB on decisions made by the Steering Committee.
11. The Steering Committee meets as necessary, but at least twice a year. Members appointed to the Steering Committee are expected to attend all Steering Committee meetings. Steering Committee meetings are not open to the public.
12. For purposes of approving matters specifically identified as being on behalf of the IAASB, each member of the Steering Committee has one vote. The affirmative vote of at least three-fourths of members present at the meeting or by simultaneous telecommunications link or by proxy, but not less than four, is required for decisions of the Steering Committee made on behalf of the IAASB.
13. The Chair of the Steering Committee, or identified designee, approves other matters that are not specifically identified as being made on behalf of the IAASB.
14. The Chair of the Steering Committee solicits the views of the IAASB on any matter the Steering Committee deems appropriate.
15. The membership, terms of reference and operating procedures of the Steering Committee are to be posted on the IAASB website.
16. The terms of reference and operating procedures of the Steering Committee are to be reviewed by the IAASB at least every three years.
- National Auditing Standards Setters
Annually, the IAASB hosts a meeting of a group of national auditing standard setters from around the world that share the common goals of promulgating high-quality standards, and reaching consensus at an early stage in their development. The Statement of Purpose of IAASB and National Auditing Standard Setters Liaison was accepted in March 2006 by the participating national auditing standard setters as reflecting the aims of the liaison activities.
Currently, the participating national auditing standard setters are from: Australia, Brazil, Canada, China, France, Germany, Hong Kong, India, Japan, Mexico, New Zealand, South Africa, The Netherlands, United Kingdom and United States of America as well as the Nordic Federation.
The IAASB has issued guidance for national auditing standard setters that adopt its International Standards with limited modifications.