Revisions to ISA 315 – IAASB

Date recorded:

At its meeting on June 18-23, 2018, the IAASB, after making amendments in response to Board members  comments received during the meeting, approved an Exposure Draft to revise ISA 315 (Revised). The ED will be issued in mid-July for comment by November 2, 2018. In finalizing the ED, the Board continued to express concern about the complexity and scalability of the standard, in particular that the linear approach to the standard (including the flowcharts) did not illustrate the iterative nature of the standard. On balance, however, the Board agreed that stakeholder views were needed to determine whether the proposals could be effectively implemented. The Board also discussed how scalability was presented, in particular how the term ‘smaller and less complex’ was used to highlight these aspects. The Board also asked for further clarification of the required evaluation of the design of the ‘information system relevant to financial reporting,’ to better distinguish this requirement from the understanding of the control activities component. The Board further supported the Task Force’s recommendation to include a specific question in the Explanatory Memorandum on the stand-back requirement (in conjunction with the requirement of ISA 3303 paragraph 18), because of mixed views relating to whether this requirement was needed. The conforming amendments to ISA 540 (Revised) are planned to be approved in an IAASB teleconference on July 17, 2018.

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