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Enhancing Audit Quality in the Public Interest: A Focus on Professional Skepticism, Quality Control, and Group Audits (Possible Amendments to CAS 200, CAS 220, CAS 315, CAS 600 and CSQC 1) [Completed]

Last up­dated:

February 2019

Overview

On July 19, 2013, the International Auditing and Assurance Standards Board (IAASB) issued its report on the Post-Implementation Review of the Clarified ISAs, including ISQC 1, Quality Control for Firms that perform Audits and Reviews of Financial Statements, and Other Assurance Engagements, (the PIR). The findings identified the need to make improvements to certain standards, specifically ISA 200, ISA 220 and ISQC 1, ISA 315 and ISA 600, in order to achieve more consistent and effective application of the ISAs. Subsequently, the IAASB’s public consultation on its Work Plan for 2015-2016 highlighted its commitment to addressing the significant findings of the PIR on a timely basis and respondents to this consultation urged the IAASB to do so in the public interest.

As a re­sult, on December 17, 2015, the IAASB issued an Invitation to Comment entitled, Enhancing Audit Quality in the Public Interest: A Focus on Professional Skepticism, Quality Control and Group Audits (the ITC) which highlights the Board’s discussions on the topics of professional skepticism, quality control and group audits – and flags potential standard-setting activities the IAASB could take to enhance audit quality. The IAASB also released a companion document, an Overview of the ITC, designed at soliciting feedback from investors, audit committees, and preparers. It summarizes the key areas the IAASB is exploring and the direction it may take and may be useful in facilitating outreach by stakeholders to develop their responses. Comments to the IAASB ITC are due by May 16, 2016.

Subsequently, the standards setters have moved on to the next stages of this initiative, as follows:

Quality Management

  • On February 8, 2019, the IAASB have released several Exposure Drafts that propose to bring important changes to the way professional accountancy firms are expected to manage quality—for audits, reviews, and other assurance and related services engagements. Comments are requested by July 1, 2019.

Professional Skepticism

  • At its meeting in September 2018, the IESBA approved a project proposal, Promoting the Role and Mindset Expected of Professional Accountants. The objective of the project is to ensure, through the development of Part 1 of the Code and other appropriate material, that the Code promotes the role, mindset and behavioral characteristics expected of all professional accountants when performing their professional activities.

Group Audits

  • The IAASB has commenced a project to revise and enhance ISA 600, Group Audits, with the objective of making ISA 600 more effective.

 

Other Developments

July 2018

In July, 2018, the staff of the AASB updated the information in respect of this project to advise that the AASB expects to issue an Exposure Draft on Quality Control for comment in Q1/2019.

November 2017

In November 2017, the AASB staff updated this project to indicate that the AASB expects to issue an Exposure Draft on Quality Control for comment in Q3/2018.

July 2017

In July 2017, the CPA Canada staff updated the information on this project to advise that the AASB expects to issue an ED in respect of Group Audits in Q2/2018.

April 2017

In April 2017, the CPA Canada staff updated the information in respect of this project to advise that the AASB expects to issue an ED on Quality Control in the first half of 2018 and an ED on Group Audits in the second half of 2018.

July 2016

On July 1, 2016, the PCAOB posted to its website an updated standard-setting agenda that outlines milestones on various standard-setting projects, including its projects on (i) Supervision of Audits Involving Other Auditors, where the PCAOB has issued a proposal for public comment by July 29, 2016 and (ii) Quality Control Standards, Including Assignment and Documentation of Firm Supervisory Responsibilities, which project is in the research and outreach stage.

February 2016

On February 29, 2016, the AASB issued an Invitation to Comment in respect of the IAASB’s consultation. Comments are due by April 15, 2016.

December 2015

On December 17, 2015, the IAASB issued an Invitation to Comment entitled, Enhancing Audit Quality in the Public Interest: A Focus on Professional Skepticism, Quality Control and Group Audits. Comments are due by May 16, 2016.

 

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