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Revisions to ISA 315 – IAASB

Date recorded:

At its meeting on June 17-21, 2019, the IAASB discussed a full version of the standard reflecting the new drafting approach that was broadly supported with the Board at its March 2019 meeting.

The Board broadly supported specific aspects of this approach, in particular the enhanced flow and understandability of the requirements, as well as the separate presentation or signposting of examples and scalability paragraphs in the application material. Notwithstanding broad support for the overall approach, concern was expressed about the change to move certain material (primarily criteria or terms previously included in requirements relating to the understanding of the system of internal control) to definitions. It was also highlighted that this could cause challenges in navigating the standard.

The Board was presented with a revised approach to drafting the requirements for the understanding the system of internal control, which reconnected the definitions, and the Board broadly supported moving forward. Specific other areas discussed and agreed include revisions to the definitions of significant risk and the inherent risk factors, specifically in relation to how fraud is presented within the inherent risk factors. Conforming amendments arising from the proposed changes to the standard will be discussed at an IAASB teleconference in August 2019 and a final draft of the proposed standard will be presented to the IAASB for approval at its September 2019 meeting.

Review the summary, including the podcast, on the IAASB's Web site.

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