2018

CPAB response to the exposure draft on the proposed ISA 315 (Revised)

Nov 06, 2018

On November 6, 2018, the Canadian Public Accountability Board (CPAB) published their response to the exposure draft on the proposed International Standard on Auditing 315 (Revised).

In their response, they state:

We are concerned that an approach to have a scaled down risk assessment process for certain audits could lead to a significant difference in the audit quality between different size entities having a negative impact on the public interest.

At a minimum, we suggest a clarification be added to the final standard that a scaled back approach to risk assessment would not be applicable to listed companies and other entities that have a significant public interest, regardless of whether the entity is not considered to be complex.

Review the response on the CPAB's website.

Emerging Technologies: An Oversight Tool for Audit Committees

Dec 12, 2018

On December 12, 2018, the Center for Audit Quality (CAQ) released a tool that provides a framework and questions that audit committees may ask management and auditors to help inform their oversight of financial reporting as emerging technologies take hold.

Leveraging the work of the Committee of Sponsoring Organizations of the Treadway Commission (COSO), the CAQ's framework has five key components. Under each component, the publication provides questions to spark dialogue among audit committees, auditors, management and others. Additionally, the tool highlights how two technologies—artificial intelligence and robotic process automation—are gaining significant traction in the financial reporting environment. An appendix points to helpful resources on emerging technologies from leading public company auditing firms and governance organizations.

Review the tool on the CAQ's website.

Envisioning the Future—Survey on the IAASB’s Future Strategy

May 24, 2018

On May 24, 2018, the International Auditing and Assurance Standards Board (IAASB) release a Strategy Survey to seek views and insights from its stakeholders on emerging developments and trends that are likely to be important to its 2020-2023 strategy.

The survey serves as an important tool to help identify key issues for consideration in developing its future strategy in the context of the IAASB’s broad strategic focus and the changing environment, and with the overriding objective of serving the public interest.

Review the press release and the Strategy Survey on the IAASB's website.

Experts Appointed to IAASB Project Advisory Panel

Mar 13, 2018

On March 13, 2018, the International Auditing and Assurance Standards Board (IAASB) Emerging Forms of External Reporting (EER) Task Force announced the appointment of 23 individuals to the recently-established EER Assurance Project Advisory Panel.

Among the new appointments is Charlotte Drain, a Director from Deloitte with over ten years’ experience of providing advisory and assurance services in the field of sustainability and has a specific focus on Integrated Reporting.

The Advisory Panel appointees will make a significant contribution to further IAASB’s work on EER assurance. Their involvement will include:

  • advising the EER Task Force on the application of ISAE 3000 (Revised) to EER engagements, and other matters within the scope of the approved Project Proposal, and providing insights into current practice across different jurisdictions and contexts;
  • providing input to the development of the non-authoritative guidance that the IAASB plans to issue; and
  • providing occasional research input on matters relating to EER assurance engagements.

Review the announcement on the IAASB's website.

Four Hot Topics Internal Audit Should Be Ready To Address In 2018

Feb 08, 2018

On February 8, 2018, Financial Executives International (FEI) released an article on how as CFOs and other leaders expect internal audit teams to be strategic, focusing more on the risks and issues of the future than only those of the past, just 28 percent of surveyed chief audit executives (CAEs) believe their functions have a strong impact and influence within their organizations.

Heading into 2018, it will therefore be important for CAEs to chart paths toward impacting and influencing their organizations. But to enhance their performance, value, and influence, internal audit groups need to be ready to address a number of high-impact issues with leadership in the year ahead.

Review the full article on FEI's website.

Global Consultation: Identifying and Assessing the Risks of Material Misstatement

Jul 16, 2018

On July 16, 2018, the In­ter­na­tional Au­dit­ing and As­sur­ance Stan­dards Board (IAASB) issued for public comment an Exposure Draft of proposed revisions to ISA 315 (Revised), Identifying and Assessing the Risks of Material Misstatement, in order to advance audit quality. Comments are requested by November 2, 2018.

To ensure that International Standards on Auditing continue to form the basis for high-quality, valuable and relevant global audits, the IAASB proposes more robust requirements and improved guidance to:

  • drive consistent and effective identification and assessment of risks of material misstatement;
  • modernize ISA 315 to meet evolving business needs, including information technology, and how auditors use automated tools and techniques, including data analytics, to perform audit procedures;
  • improve the standard’s applicability to entities across a wide spectrum of circumstances and complexities; and
  • focus auditors on exercising professional skepticism throughout the risk identification and assessment process.

Through its ISA Implementation Monitoring Project and targeted continuing stakeholder outreach, the IAASB has received significant stakeholder input as the proposed revisions have been developed. The Exposure Draft is a key element of the IAASB’s work to address the fundamental elements of an audit and thereby enhance audit quality.

Re­view the press re­lease and the Exposure Draft on the IAASB's web­site.

 

How to demonstrate data security compliance for even the most skeptical auditor

Aug 07, 2018

On August 7, 2018, Accounting Today published an article on how in order for organizations to ensure compliance with federal mandates to protect the privacy of financial, investor and personal data that’s visible to your employees, one crucial requirement is an indisputable audit trail that satisfies the evidence requirements of even the most scrutinizing auditor.

This audit trail needs to include complete visibility into every action performed by staff, especially those with access to customer, financial and investor data. A good system should track every application used, webpage visited, record copied, file saved, print screen generated, and page printed, etc. Only then will the organization truly know whether protected data has been appropriately accessed and used, or if users, whether their intent was malicious or even accidental, properly used that information. The system should also be able to detect external attackers posing as insiders via stolen credentials.

Review the full article on Accounting Today's website.

IAASB Chairman Submits Comment Letter to the Monitoring Group

Feb 08, 2018

On February 8, 2018, the International Auditing and Assurance Standards Board (IAASB) released a comment letter submitted by IAASB Chairman Arnold Schilder to the Monitoring Group's Consultation Paper, "Strengthening the Governance and Oversight of the International Audit-related Standard-setting Boards in the Public Interest".

In the comment letter, he identifies the two principal dimensions – one at the governance and strategic level, the other at the operating level – that offer the potential to alleviate so-called perceptions of undue influence by any stakeholder group and improve the axes of relevance, timeliness and public interest. These are:

  1. Agreeing Standard Setting Strategy & Priorities – that is, the mechanism around WHAT ISSUES the IAASB is to focus on and AT WHAT PACE, and which ones they will not deal with at any point in time.
  2. Recalibrating the Task Force Model – that is, ensuring the veracity of the INPUT and on WHOSE recommendations the IAASB’s deliberations and decision-making are based.

Review the press release and comment letter on the IAASB's website.

IAASB Modernizes Auditing of Accounting Estimates in Support of Audit Quality

Oct 03, 2018

On October 3, 2018, the International Auditing and Assurance Standards Board (IAASB) released International Standard on Auditing (ISA) 540 (Revised), its revised standard for the audit of accounting estimates and related disclosures.

This revised standard is the first to be completed as part of the IAASB’s broader program ‘Addressing the Fundamental Elements of an Audit’ and is an important part of the IAASB’s efforts to improve audit quality globally. Some of the significant revisions include:

  • An enhanced risk assessment that requires auditors to consider complexity, subjectivity and other inherent risk factors in addition to estimation uncertainty. This will drive auditors to think more deeply about the risks inherent to accounting estimates.
  • A closer link between the enhanced risk assessment and the methods, data and assumptions used in making accounting estimates, including the use of complex models.
  • Specific material to show how the standard is scalable to all types of accounting estimates.
  • Emphasis on the importance of applying appropriate professional skepticism when auditing accounting estimates to foster a more independent and challenging skeptical mindset in auditors.

ISA 540 (Revised) becomes effective for financial statement audits for periods beginning on or after December 15, 2019.

Review the press release and ISA 540 (Revised) on the IAASB's website.

IAASB Project Proposal – Emerging Forms of External Reporting

Jan 08, 2018

On January 8, 2018, the International Auditing and Assurance Standards Board (IAASB) released "Guidance on Key Challenges in Assurance Engagements Over Emerging Forms of External Reporting (“EER”)".

The IAASB’s Emerging forms of External Reporting (EER) Task Force developed a Feedback Statement to highlight the responses received on the August 2016 Discussion Paper, . This Feedback Statement provides an overview of the key messages from the responses to the questions in the Discussion Paper. The responses have helped inform the IAASB as to what its next steps should be to progress with its project in this area. Developing guidance to help overcome the Ten Key Challenges identified in the Discussion Paper will require close collaboration with a wide range of stakeholder groups.

To further its work in this area, the IAASB approved a project proposal in October 2017. The project is intended to develop new non-authoritative guidance to address key challenges, identified by the IAASB, which arise in the performance of assurance engagements over EER in applying ISAE 3000 (Revised). This project was made possible through a grant from the Gordon and Betty Moore Foundation with support from the World Business Council for Sustainable Development (WBCSD).

Review the guidance on the IAASB's website.

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