Two focus on enhancing the auditor's consideration of controls at service organizations, and the third addresses the communication of deficiencies in internal control to those charged with governance. The IAASB has also invited comment on two exposure drafts of International Standards on Auditing (ISA) that were revised and redrafted in accordance with the new clarity drafting conventions.
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Proposed new standards:
- Proposed ISA 402 (Revised and Redrafted), Audit Considerations Relating to an Entity Using a Third Party Service Organization. Addresses the auditor's responsibilities to obtain audit evidence when an entity uses one or more service organizations. This may include obtaining reports prepared by the auditors of those organizations. Comments due 30 April 2008.
- Proposed International Standard on Assurance Engagements (ISAE) 3402 Assurance Reports on Controls at a Third Party Service Organization. Complements proposed ISA 402 (Revised and Redrafted) in that reports prepared in accordance with proposed ISAE 3402 will be capable of providing appropriate audit evidence under the proposed ISA. It is intended to ensure that reports issued in one country are likely to meet the requirements of the auditors of user entities in other countries. Comments due 31 May 2008.
- Proposed ISA 265 Communicating Deficiencies in Internal Control. Deals with the auditor's responsibility to communicate to management and those charged with governance deficiencies in internal control that have been identified by the auditor. Comments due 30 April 2008.
New clarity exposure drafts:
- ISA 501 (Redrafted) Audit Evidence Regarding Specific Financial Statement Account Balances and Disclosures. Comments due 31 March 2008.
- ISA 520 (Redrafted) Analytical Procedures. Comments due 31 March 2008.
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The exposure drafts may be downloaded without charge from
www.ifac.org/EDs. Here is the
Press Release (PDF 109k).
