IAASB releases its proposed strategy and work plan

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20 Dec, 2013

The International Auditing and Assurance Standards Board (IAASB) has released a consultation paper outlining its proposed strategy for the five year period 2015-2019 and work programme for the 2015-2016 period. The paper outlines three key strategic objectives around financial statement audits, global developments and collaboration, and puts forward a work plan that deploys the IAASB's resources "in a way that has the greatest potential to serve the public interest", including a focus on the audits of financial institutions.

The consultation paper sets out the following strategic objectives for the 2015-2019 periods, as identified by the IAASB:

  • Develop and maintain high-quality International Standards on Auditing (ISAs) that are accepted as the basis for high-quality financial statement audits. This will involve, among other things, responding to key implementation issues identified, liaison with audit inspection groups and considering feedback from a stakeholder survey
  • Ensure the IAASB’s suite of standards continues to be relevant in a changing world by responding to stakeholder needs. This may consider the impact of increasingly complex information technology reliant business environments, changes in financial reporting and internal control standards, new innovative forms of reporting such as integrated reporting, activities that promote the adoption of the IAASB's standards, and processes to review implementation issues (including post-implementation reviews)
  • Collaborate and cooperate with contributors to the financial reporting supply chain to foster audit quality and stay informed. This will involve continued liaison and further development of relationships with key stakeholders, including the International Accounting Standards Board (IASB), International Forum of Independent Audit Regulators (IFIAR), International Organization of Securities Commissions (IOSCO), the Financial Stability Board (FSB), the IAASB's Consultative Advisory Group (CAG), practitioners, International Organisation of Supreme Audit Institutions (INTOSAI), national standard setters, and others.

The IAASB acknowledges its work is highly influenced by the international environment in which it operates, and cites the particular importance of global developments such the G20's commitment to reform of the financial system in light of the global financial crisis, IOSCO's new strategic direction, and recent audit reforms of the European Commission (EC) and US Public Company Accounting Oversight Board (PCAOB).

In terms of its 2015-2016 work plan, the IAASB proposes prioritising the following topics:

  • Quality control - Consideration of issues related to ISQC 1 Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements, and related provisions of ISA 220 Quality Control for an Audit of Financial Statements, with a view to possible amendments or possibly a new ISA on engagement quality control reviews (EQCRs). Additional guidance such as staff publications will also be considered
  • Professional scepticism - Consideration of how to reinforce the concept of professional scepticism in an audit, which may result in amendments to ISAs, additional requirements or guidance
  • Special audit considerations relevant to financial institutions - focused on clarifying and enhancing the relationship between the banking supervisors and the bank’s external auditors, and address auditing issues surrounding the use of fair value accounting and related estimates (including impairment and loan loss provisioning). Revision of existing ISAs will be considered, as will the development of a special consideration ISAs, International Auditing Practice Notes (IAPNs) or other guidance.

Other activities planned for 2015-2016 include stakeholder liaison, supporting global adoption of ISAs, the development of a post-implementation review process for the IAASB's other assurance and related services standards, and information gathering on topics such as integrated reporting and group audits.

Comments on the consultation paper are requested by 4 April 2014. Click for IAASB release (link to IFAC website).

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