IAASB releases new and revised standards on auditor reporting

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16 Jan, 2015

The International Auditing and Assurance Standards Board (IAASB) has released its new and revised auditor reporting standards that are designed to significantly enhance auditor's reports for investors and other users of financial statements. Most notable enhancement is a new requirement for auditors of listed entities' financial statements to communicate 'Key Audit Matters' that the auditor views as most significant, with an explanation of how they were addressed in the audit.

The complete suite of new and revised standards consists of

  • ISA 700 (Revised) Forming an Opinion and Reporting on Financial Statements
  • ISA 701 Communicating Key Audit Matters in the Independent Auditor's Report
  • ISA 570 (Revised) Going Concern
  • ISA 705 (Revised) Modifications to the Opinion in the Independent Auditor's Report
  • ISA 706 (Revised) Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor's Report
  • ISA 260 (Revised) Communication with Those Charged with Governance and
  • Conforming Amendments to ISAs 210, 220, 230, 510, 540, 580, 600, and 710

The new and revised auditor reporting standards will be effective for audits of financial statements for periods ending on or after 15 December 2016.

The Financial Reporting Council’s (FRC's) equivalent ISAs (UK and Ireland) are largely developed from the ISAs published by the IAASB and are amended, where necessary, to address specific UK and Ireland legal and regulatory requirements and other matters that are appropriate in the UK and Ireland national legislative, cultural and business context.  The FRC is expected to consult on these changes as well as those that arise from the UK implementation of the EU Audit Directive and Audit Regulation (which is currently being consulted on by the FRC) as part of a joint consultation in due course.   

Please click for the IAASB press release and access to all documents, including the new and revised standards, an At a Glance summary, an Auditor Reporting Fact Sheet The New Auditor’s Report: Greater Transparency into the Financial Statement Audit and a Basis for Conclusions (all links to IFAC website).

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