At its meeting on October 24-26, 2017, the IAASB discussed the respondents’ comments on the Exposure Draft of Proposed ISA 540 (Revised) and the ISA 540 Task Force’s proposed direction regarding the scalability of the ISA. The Board also discussed how the concept of a spectrum of inherent risk could be more clearly reflected in the ISA to support scalability of the auditor’s response, whether inherent risk is low or not low, and the conforming amendments to ISA 500. The Board supported aligning the terms used for the risk factors with those being considered for similar factors in the revision of ISA 315 (Revised) and in the U.S. Public Company Accounting Oversight Board’s proposals on auditing accounting estimates. The Board also supported the proposed direction of the ISA 540 Task Force in restructuring the ISA and discussed the potential implications, for the scalability of the standard, of removing the threshold of low inherent risk.

Review the summary and podcast on the IAASB's Web site.