AASB Response – Proposed Narrow Scope Amendments to ISA 700 (Revised) and ISA 260 (Revised)
May 09, 2023
On May 9, 2023, the Auditing and Assurance Standard Board submitted a comment letter responding to the IAASB’s Exposure Draft, Proposed Narrow Scope Amendments to ISA 700 (Revised), Forming an Opinion and Reporting on Financial Statements and ISA 260 (Revised), Communication with Those Charged with Governance.
Here’s an excerpt from the comments:
“We support the proposed amendments to ISA 700 (Revised). We agree that the revisions provide a clear mechanism to operationalize the IESBA’s transparency requirement, while recognizing that some jurisdictions, like Canada, adopt the ISAs but apply ethical requirements different from the IESBA Code.
However, we believe paragraph 17 of ISA 260 (Revised) should be amended to include an explicit requirement for the auditor to communicate with those charged with governance which independence requirements were applied. We believe those charged with governance should be fully informed regarding the firm’s independence, including which independence requirements were applied. We are concerned that proposed paragraph A29 of ISA 260 (Revised) may not, in all circumstances, achieve this desired transparency.
” Finally, we are concerned that the IAASB has other projects underway, in addition to this project, that may result in multiple changes to the auditor’s report. These changes, in relatively quick succession, could create implementation challenges and reduce the understandability of the auditor’s report. In considering any future revisions to the auditor’s report, we strongly urge the IAASB to ensure such revisions are coordinated to mitigate the risk of these potential unintended consequences.
Access the AASB comments on the IAASB website.