IAASB Technical Director Matthew Waldron hosts the June 2017 audio podcast featuring Chairman Arnold Schilder and IAASB Members Karen French and Megan Zietsman to discuss key activities and events from the board's June 19-22, 2017 meeting in New York, New York.
The International Auditing and Assurance Standards Board (IAASB) welcomes the adoption by the US Public Company Accounting Oversight Board (PCAOB) of a new auditing standard to enhance auditor’s reports by providing additional, relevant information to users, including critical audit matters.
The PCAOB’s new standard, which is subject to US Securities and Exchange Commission (SEC) approval, is comparable with the IAASB’s new and revised Auditor Reporting Standards, which require the communication of key audit matters in auditor’s reports of listed entities and became effective for December 2016 year-end audits.
“The PCAOB’s adoption of a standard to enhance auditor’s reports is a significant step forward in providing useful and relevant information to investors and other users,” said Prof. Arnold Schilder, IAASB Chairman. “Auditor’s reports are no longer “boilerplate” reports—auditors are now providing additional information about the audit, which is highly valued by users. We are particularly pleased that the PCAOB’s requirements are comparable to those of the IAASB. Coordination among standard setters is important in striving toward auditing standards that are, in principle, globally consistent.”
Two new publications comparing the IAASB and PCAOB standards have been developed by the IAASB’s Auditor Reporting Implementation Working Group. These publications will assist users in understanding the key similarities and differences between the IAASB and PCAOB requirements. Additional information on the IAASB’s new and revised Auditor Reporting Standards, as well as support materials, are available online.
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.
Following the US Public Company Accounting Oversight Board (PCAOB)’s recent release of AS 3101, The Auditor's Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion, the IAASB's Auditor Reporting Implementation Working Group has prepared a comparison between the IAASB and PCAOB standards. These publications will help improve understanding of the key aspects of the standards from both organizations.
e International Auditing and Assurance Standards Board (IAASB) Data Analytics Working Group is pleased to announce the members of the recently-established Data Analytics Project Advisory Panel.
This Advisory Panel was established to inform the IAASB’s work on data analytics by:
advising the Working Group (and other IAASB task forces/working groups as necessary) on the developments in data analytics’ use in audit, thereby further informing the IAASB’s thinking and approach to its standard-setting activities;
serving as a technical resource to the IAASB and Working Group and providing an external perspective on the use of data analytics in a financial statement audit;
acting as a sounding board for the Working Group in Request for Input feedback considerations and when exploring the potential way forward, including implications and timing; and
providing input to any guidance or materials the IAASB may develop.
In connection with the establishment of the Working Group and its technology focus, the IAASB released a Request for Input, Exploring the Growing Use of Technology in the Audit, with a Focus on Data Analytics,in September 2016. It provides insights into data analytics’ opportunities and challenges and outlines the Working Group’s insights to date.
Additional information and project updates are available on the IAASB’s project page.
In this video, IAASB Data Analytics Task Force Chair, Robert Dohrer, and Working Group Members Alan Young, Partner, EY, and Peter Eimers, Partner, PwC Netherlands, discuss matters related to the widespread use of data analytics in audit. These include:
enhances requirements for risk assessment procedures to include specific factors related to accounting estimates, namely complexity, judgment, and estimation uncertainty;
sets a more detailed expectation for the auditor’s response to identified risks related to accounting estimates, including augmenting the auditor’s application of professional skepticism; and
is scalable regardless of the size or sector of the business or audit firm.
Significant changes in how auditors evaluate accounting estimates and related disclosures have been proposed by the International Auditing and Assurance Standards Board (IAASB). The changes will require auditors to sharpen their focus on risks of material misstatements arising from accounting estimates, and to address those risks with more granular audit requirements.
“Accounting estimates are used in many financial statements—often they are complex, and require judgement or have estimation uncertainty. It is especially important that auditors are required to design and perform procedures to ensure estimates’ reliability,” said Prof. Arnold Schilder, IAASB Chairman. “The proposed standard will bring significant changes to many audits, but particularly to audits of financial institutions, such as banks and insurers, given the recent shift to accounting for expected credit losses.”
The proposed standard continues the evolution of audit to meet the challenges of an increasingly complex global economy. It was developed following extensive consultation with regulators and practitioners, including those who audit small, medium, and large businesses.
The proposed standard:
enhances requirements for risk assessment procedures to include specific factors related to accounting estimates, namely complexity, judgment, and estimation uncertainty;
sets a more detailed expectation for the auditor’s response to identified risks, including augmenting the auditor’s application of professional skepticism; and
is scalable regardless of the size or sector of the business or audit firm.
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.
