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Revisions to ISA 315 – IAASB

Date recorded:

At its meeting on March 11, 2019, the IAASB discussed the ISA 315 Task Force’s initial proposals to address specific responses to the Exposure Draft, in particular, the broad concerns in relation to the length and complexity of the standard. In doing so, the Board considered alternative approaches about how to present the requirements for the auditor’s understanding of the entity’s system of internal control.

The Board agreed to move forward by presenting the requirements at a broader, higher level (i.e., in a more direct way in terms of focusing on the ‘what’ that is required from the auditor), while maintaining the robustness of the current standard. Accordingly, all of the requirements will be reconsidered, the criteria or matters that are definitional will be relocated to definitions, and the ‘why’ and ‘how’ will be further explicitly considered as to where it is appropriate to be moved to. The Board acknowledged that scalability was likely best addressed in the application material.

The Board’s discussions also focused on proposed changes to address specific issues within the section on understanding the entity’s system of internal control, in particular, in relation to clarifications on controls relevant to the audit, the information system and control activities components, and the various evaluations required within this section of the standard. Aspects of the Exposure Draft and related feedback that have not been addressed during this meeting will be presented at the June 2019 IAASB meeting. The ISA 315 Task Force will continue to progress the proposed changes to ISA 315 with a targeted approval of the final standard at the September 2019 IAASB meeting.

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

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