The IAASB undertook its 'clarification' project over a number of years, and all the clarified ISAs were finalised in 2009. The objectives of the clarification project were to improve the clarity and understandability of ISAs and International Standard on Quality Control (ISQC) 1, in order to facilitate consistency in their application. The clarification process also resulted in substantial revisions to around half of the ISAs.

The post-implementation review follows an earlier pre-implementation process that was conducted over 2009-2010, which saw the changes clarified ISAs being viewed as helpful improvements. Input into the post-implementation review process was received from within the profession (including from accounting firms and International Federation of Accountants (IFAC) member bodies) and from external groups (including independent audit inspection bodies and other regulators).

Findings from the review include:

• There was general agreement that the clarified ISAs were an improvement and were generally well received, with some specific feedback on the format of ISAs
• Although there is acceptance that common auditing standards is beneficial to audit quality on a global basis, this is not considered automatic "given differences in culture and the stage of development of the auditing profession in different jurisdictions"
• Training, additional guidance, methodology and technical support are essential to achieve consistent application of ISAs
• There were mixed views as to whether the revised ISAs achieve the right balance between principles and rules, and whether they have resulted in too little or too much documentation
• In terms of comments on individual ISAs, numerous comments were received, and these were classified into priority 'themes'. The key priorities include:
  • More emphasis on professional scepticism is needed in a number of ISAs (ISA 200 and others)
  • Concerns were expressed by regulators that engagement quality control reviews (EQCRs) are not sufficiently robust (ISA 220)
  • There is concern that the nature and number of significant risks identified in practice, and in applying the requirements to obtain an understanding of an entity's internal control (ISA 315)
  • Many concerns were raised about inconsistency in the degree to which the group auditor becomes involved in the work of component auditors, and in the determination of component materiality (ISA 600)

The report also outlines findings from a survey of small and medium sized practices on the audits of small and medium sized entities, and a further survey of audit committees focused on communications with those charged with governance, including on deficiencies in internal control (ISA 260 and ISA 265).

The findings from the review will be incorporated into the IAASB's standard setting activities and the development of its strategy and work plan for 2015-2019. Earlier in 2013, the IAASB undertook a survey as a first step in developing its strategy and work plan.

Click for IAASB press release (link to IFAC website).