The consultation paper sets out the following strategic objectives for the 2015-2019 periods, as identified by the IAASB:

• Develop and maintain high-quality International Standards on Auditing (ISAs) that are accepted as the basis for high-quality financial statement audits. This will involve, among other things, responding to key implementation issues identified, liaison with audit inspection groups and considering feedback from a stakeholder survey
• Ensure the IAASB’s suite of standards continues to be relevant in a changing world by responding to stakeholder needs. This may consider the impact of increasingly complex information technology reliant business environments, changes in financial reporting and internal control standards, new innovative forms of reporting such as integrated reporting, activities that promote the adoption of the IAASB's standards, and processes to review implementation issues (including post-implementation reviews)
• Collaborate and cooperate with contributors to the financial reporting supply chain to foster audit quality and stay informed. This will involve continued liaison and further development of relationships with key stakeholders, including the International Accounting Standards Board (IASB), International Forum of Independent Audit Regulators (IFIAR), International Organization of Securities Commissions (IOSCO), the Financial Stability Board (FSB), the IAASB's Consultative Advisory Group (CAG), practitioners, International Organisation of Supreme Audit Institutions (INTOSAI), national standard setters, and others.

The IAASB acknowledges its work is highly influenced by the international environment in which it operates, and cites the particular importance of global developments such the G20's commitment to reform of the financial system in light of the global financial crisis, IOSCO's new strategic direction, and recent audit reforms of the European Commission (EC) and US Public Company Accounting Oversight Board (PCAOB).

In terms of its 2015-2016 work plan, the IAASB proposes prioritising the following topics:

• Quality control - Consideration of issues related to ISQC 1 Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements, and related provisions of ISA 220 Quality Control for an Audit of Financial Statements, with a view to possible amendments or possibly a new ISA on engagement quality control reviews (EQCRs). Additional guidance such as staff publications will also be considered
• Professional scepticism - Consideration of how to reinforce the concept of professional scepticism in an audit, which may result in amendments to ISAs, additional requirements or guidance
• Special audit considerations relevant to financial institutions - focused on clarifying and enhancing the relationship between the banking supervisors and the bank’s external auditors, and address auditing issues surrounding the use of fair value accounting and related estimates (including impairment and loan loss provisioning). Revision of existing ISAs will be considered, as will the development of a special consideration ISAs, International Auditing Practice Notes (IAPNs) or other guidance.

Other activities planned for 2015-2016 include stakeholder liaison, supporting global adoption of ISAs, the development of a post-implementation review process for the IAASB's other assurance and related services standards, and information gathering on topics such as integrated reporting and group audits.

Comments on the consultation paper are requested by 4 April 2014. Click for IAASB release (link to IFAC website).

The IAASB undertook its 'clarification' project over a number of years, and all the clarified ISAs were finalised in 2009. The objectives of the clarification project were to improve the clarity and understandability of ISAs and International Standard on Quality Control (ISQC) 1, in order to facilitate consistency in their application. The clarification process also resulted in substantial revisions to around half of the ISAs.

The post-implementation review follows an earlier pre-implementation process that was conducted over 2009-2010, which saw the changes clarified ISAs being viewed as helpful improvements. Input into the post-implementation review process was received from within the profession (including from accounting firms and International Federation of Accountants (IFAC) member bodies) and from external groups (including independent audit inspection bodies and other regulators).

Findings from the review include:

• There was general agreement that the clarified ISAs were an improvement and were generally well received, with some specific feedback on the format of ISAs
• Although there is acceptance that common auditing standards is beneficial to audit quality on a global basis, this is not considered automatic "given differences in culture and the stage of development of the auditing profession in different jurisdictions"
• Training, additional guidance, methodology and technical support are essential to achieve consistent application of ISAs
• There were mixed views as to whether the revised ISAs achieve the right balance between principles and rules, and whether they have resulted in too little or too much documentation
• In terms of comments on individual ISAs, numerous comments were received, and these were classified into priority 'themes'. The key priorities include:
  • More emphasis on professional scepticism is needed in a number of ISAs (ISA 200 and others)
  • Concerns were expressed by regulators that engagement quality control reviews (EQCRs) are not sufficiently robust (ISA 220)
  • There is concern that the nature and number of significant risks identified in practice, and in applying the requirements to obtain an understanding of an entity's internal control (ISA 315)
  • Many concerns were raised about inconsistency in the degree to which the group auditor becomes involved in the work of component auditors, and in the determination of component materiality (ISA 600)

The report also outlines findings from a survey of small and medium sized practices on the audits of small and medium sized entities, and a further survey of audit committees focused on communications with those charged with governance, including on deficiencies in internal control (ISA 260 and ISA 265).

The findings from the review will be incorporated into the IAASB's standard setting activities and the development of its strategy and work plan for 2015-2019. Earlier in 2013, the IAASB undertook a survey as a first step in developing its strategy and work plan.

Click for IAASB press release (link to IFAC website).

The draft framework, titled Good Governance in the Public Sector, was developed by an 'international reference group' of individuals drawn from a wide range of organisations, although each member acted in their personal capacity. The draft framework is not intended to replace national and sectoral governance codes, but instead is designed to be used in updates and reviews of any such codes. It covers a broad array of topics, including a commitment to integrity, ethical values, and the rule of law, stakeholder engagement, internal control, and financial management.

On the topic of accountability, the draft framework asserts that "public sector entities need to demonstrate that they have delivered their stated commitments, requirements, and priorities and have used public resources effectively in doing so", and so recommends reporting publicly, at least annually, performance information and accompanying financial statements. The framework recommends the financial statements be prepared in accordance with International Public Sector Accounting Standards (IPSASs), as issued by the International Public Sector Accountancy Standards Board (IPSASB), and that those financial statements be subject to external audit. In this regard, the document draws from, and references, an earlier report from the International Monetary Fund (IMF), Fiscal Transparency, Accountability, and Risk (link to IMF website), which provides more background information and includes calls for a greater emphasis on the international reporting standards applying to the consolidated public sector.

In addition, the draft framework also recommends defining public sector outcomes in terms of sustainable economic, social and environmental benefits, and accordingly calls for public sector entities to consider the combined economic, social, and environmental impact of their policies, plans, and decisions. In this regard, it puts forward the view that it is "essential that future obligations to citizens are fully reflected in the long-term budget and that all future liabilities are completely transparent" (see also an IPSASB proposal on this topic published in 2011).

Comments on the draft framework close on 17 September 2013. Click for press release (link to IFAC website).

Following is a brief summary of the new requirements:

• Conflicts of interest.  The revised Code includes specific requirements guidance on identifying, evaluating, and managing conflicts of interest. The new guidance states that a professional accountant must not allow a conflict of interest to compromise professional or business judgement, provides examples of possible conflicts of interest, and explains how to manage conflicts of interest whilst maintaining confidentiality and complying with the other provisions of the code.  The new requirements follow the publication of an exposure draft in December 2011 and are effective from 1 July 2014
• Breaches of the Code.  The revised Code requires new requirements where a breach of an independence requirement the Code has occurred.  The Code now requires a firm to undertake various actions, which may include terminating the relationship causing the breach, evaluating the significance of the breach, communicating the breach, and documentation requirements.  These amendments resulted from an exposure draft published in October 2011 and are effective from 1 April 2014
• Definition of 'engagement team'.  These amendments to the code ensure consistency with the revised International Standard on Auditing ISA 610 Using the Work of Internal Auditors, which now provides guidance on when internal auditors can provide direct assistance to the external auditor. The revised definition of the term “engagement team ” excludes individuals within the client’s internal audit function who provide direct assistance on an audit engagement when the external auditor complies with the requirements of ISA 610. The revised definition is the result of a February 2012 exposure draft and is effective for audits of financial statements for periods ending on or after 15 December 2014.

Click for IESBA press release (link to IFAC website).

The new requirements are contained in a revised version of International Standard on Auditing ISA 610 Using the Work of Internal Auditors, and follows an earlier revision to the standard in March 2012.

At the time of issuing the revised ISA 610 in 2012, the IAASB decided to only include provisions addressing the external auditor’s use of the work of the internal audit function, so as to allow the International Ethics Standards Board for Accountants (IESBA) to expose complimentary amendments to the Code of Ethics for Professional Accountants to deal with the nature of the audit "engagement team".

With the release of the revised ISA, the standard now contains information about:

• When an auditor may use internal auditors to provide direct assistance (if not prohibited by relevant laws), prohibiting such involvement where there are significant threats to the objectivity of the internal auditor, or where the internal auditor lacks sufficient competence to perform the proposed work
• Guidance on the nature and extent of work that can be assigned to internal auditors, prohibiting involvement in such areas as significant audit judgements, higher risk areas or areas where the internal auditor has been involved
• Process steps involved in using an internal auditor, including written agreement from authorised representations that internal auditors can follow the directions of the external auditor, confidentiality requirements, and the direction, supervision and review of the internal auditor's work
• Audit documentation requirements.

Consistent with the discussion above, the new requirements make it clear that an audit “engagement team” excludes individuals within the client’s internal audit function who provide direct assistance on an audit engagement when the external auditor complies with the requirements of ISA 610 and the Code of Ethics for Professional Accountants has also been similarly amended. A number of consequential amendments are also made to various other pronouncements to take the new requirements into account.

The revisions to ISA 610 are effective for audits of financial statements for periods ending on or after 15 December 2014.

Click for IAASB press release (link to IFAC website).

The key changes concern

• allowing greater flexibility in measuring practical experience,
• permitting supervisors or mentors to direct an aspiring professional accountant's experience, and
• requiring practical experience to be recorded in a verifiable and consistent form.

The release of the revised IES 5 represents the fourth IES released by the IAESB in a project to revise its suite of eight IESs. The current timetable envisages that all IESs will have been revised and redrafted, or redrafted only, by the fourth quarter of 2013.

Please click for further information on the IFAC website:

• Press release
• Access to IES 5 Initial Professional Development—Practical Experience

The IAASB is considering a strategy period of five years, rather than its past practice of three years. The IAASB believes that extending its strategy period will "enable a better understanding by stakeholders of its medium-to-longer term priorities, and provide a suitable context for purposes of its decisions on specific initiatives".

The survey is structured in three sections:

• Section I seeks information about the capacity in which respondents are responding to the questionnaire
• Section II describes the anticipated stage of completion of current IAASB projects by the beginning of 2015
• Section III includes the specific questions asked of respondents.

The survey is open for comment until 7 May 2013 and the responses will be used in the development of a formal consultation paper on the IAASB's strategy and work program, which is expected to be issued in late 2013.

Click for IAASB press release (link to IFAC website).

The revised standard, IES 1 Entry Requirements to Professional Accounting Education Programs (link to IFAC website) has been issued as a result of the IAESB's 'clarity' programme and follows the issue of an exposure draft in June 2011.

The revised IES 1 outlines the principles to be used by IFAC member firms when setting and communicating educational requirements for entry to professional accounting education programs.  It seeks to ensure a sufficient number of high-quality aspiring professional accountants by setting out principles for entry requirements for professional accounting education programs that are neither too high (causing unnecessary barriers to entry to the profession), nor too low (causing individuals to believe falsely they have a likelihood of completing the education successfully).

Consistent with the proposals in the June 2011 exposure draft, the revised IES 1 focuses on allowing flexible access to professional accounting education, including removing the previous requirement of a recognised university degree programme or its equivalent, and instead stating that such a requirement is 'not precluded'.  Various other changes are also included in the revised IES 1

The revised IES 1 is effective from 1 July 2014.  Click for IAESB press release (link to IFAC website).

The request is formalised in IFAC's Call for Nominations for Boards and Committees in 2014 (link to IFAC website) and represents the beginning of the period for submitting nominations for available positions for membership in 2014 on the following boards and committees:

• IFAC Board
• Independent standard-setting boards:
  • International Auditing and Assurance Standards Board (IAASB)
  • International Accounting Education Standards Board  (IAESB)
  • International Ethics Standards Board for Accountants (IESBA)
  • International Public Sector Accounting Standards Board (IPSASB) - the first time nominations for this board have been open to the public
• IFAC committees:
  • Professional Accountancy Organization (PAO) Development Committee
  • Professional Accountants in Business (PAIB) Committee
  • Small and Medium Practices (SMP) Committee
• Compliance Advisory Panel (CAP)
• Nominating Committee (NC).

Across the above boards and committees, there are 46 vacancies including the chairs of the PAO and PAIB committees.

The period for nominations ends on 15 March 2013.  Click for IFAC press release (link to IFAC website).