Performing an Audit Over the past few years, much attention has been paid to the issue of global harmonization of generally accepted accounting principles while, at the same time, a much quieter revolution has been taking place in generally accepted auditing standards GAAS. The result will make GAAS for nonpublic companies easier to understand and apply, as well as more consistent across international borders, while avoiding unnecessary conflict with auditing standards for public companies issued by the PCAOB. The Clarity Project will result in the first complete redrafting and recodification of U. GAAS since While the practical implications of many of these changes to auditing standards may be subtle, some others will significantly affect audit practice as well as audit education.

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In , IFAC approved a series of reforms designed, among other things, to further strengthen its standard-setting processes, including those of the IAASB, so that they are responsive to the public interest.

This program involved the application of new conventions to all ISAs, either as part of a substantive revision or through a limited redrafting to reflect the new conventions and matters of clarity generally. Terms of Reference 1. The IAASB develops and issues, in the public interest and under its own authority, high-quality auditing and assurance standards and other pronouncements for use around the world.

The IFAC Board has determined that designation of the IAASB as the responsible body, under its own authority and within its stated terms of reference, best serves the public interest in achieving this aspect of its mission. International Standards on Assurance Engagements ISAEs to be applied in assurance engagements other than audits or reviews of historical financial information.

The IAASB also publishes other pronouncements on auditing and assurance matters, thereby advancing public understanding of the roles and responsibility of professional auditors and assurance service providers. The appointment as Deputy Chair does not imply that the individual concerned is the Chair-elect.

Not all non-practitioners are therefore eligible to be public members. However, the selection process also seeks a balance between the personal and professional qualifications of a nominee and representational needs, including gender balance, of the IAASB. Accordingly, consideration will be given to other factors including geographic representation, sector of the accountancy profession, size of organization, and level of economic development.

IAASB members may be accompanied at meetings by a technical advisor. A technical advisor has the privilege of the floor with the consent of the IAASB member he or she advises, and may participate in projects. Technical advisors are expected to possess the technical skills to participate, as appropriate, in IAASB debates and attend IAASB meetings regularly to maintain an understanding of current issues relevant to their role.

Observers may attend IAASB meetings, have the privilege of the floor, and may participate in projects. IAASB members are required to sign an annual statement declaring they will act in the public interest and with integrity in discharging their roles within IFAC. A member may serve up to two consecutive terms, for an aggregate term of six years. The Chair ordinarily may serve three consecutive terms as Chair or as a member for one to two terms preceding the appointment as Chair , for an aggregate of nine years.

In exceptional circumstances, to be specified by the Nominating Committee, the Chair may serve for one additional consecutive term, for an aggregate term of twelve years. In the event of the absence of both, the members present shall select one of their number to take the chair for the duration of the meeting, or of the absence of the Chair and Deputy Chair.

The affirmative vote of at least twelve of those present at a meeting in person or by simultaneous telecommunications link is required to approve or withdraw International Standards and to approve exposure drafts. IAASB meetings to discuss the development, and to approve the issuance or withdrawal of International Standards, and to approve the issuance of exposure drafts and other pronouncements, are open to the public.

Matters of a general administrative nature or with privacy implications may be dealt with in closed sessions of the IAASB; no decisions that would affect the content of the International Standards and other pronouncements issued by the IAASB are made in a closed session.

It also promotes the endorsement of the International Standards by national standard setters, legislators and securities exchanges and promotes debate with users, regulators and practitioners throughout the world to identify user needs for new International Standards and guidance.

The IAASB publishes an annual report, outlining its work program, activities and progress made in achieving its objectives during the year.


IAASB Clarity Project Update

This article provides a summary of the reasons for, and effects of, the Clarity Project from an international and a UK and Ireland perspective. The broad aim of the project was to enhance the understandability of the ISAs, which should encourage consistent application and lead to an improvement in audit quality worldwide. In addition to this enhanced understandability, many of the ISAs have been revised, resulting in substantive changes to the contents of the ISAs. Redrafted means that a standard has a new structure, in which information is presented in separate sections: Introduction, Objective, Definitions, Requirements, and Application and Other Explanatory Material.


International Auditing and Assurance Standards Board Completes First Phase of Clarity Project

Subject to any comments on exposure, the final standards will become effective for audits of financial statements for periods beginning on or after December 15, When completed, 21 extant ISAs will have been fully revised, or updated and redrafted, in the last five years, and the remaining 11 will have been redrafted in accordance with the new conventions. How to Comment Comments on the exposure drafts are requested by April 15, Comments may be submitted by email to EDComments ifac. About the IAASB and IFAC The objective of the IAASB is to serve the public interest by setting high quality auditing and assurance standards and by facilitating the convergence of international and national standards, thereby enhancing the quality and uniformity of practice throughout the world and strengthening public confidence in the global auditing and assurance profession.

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Improving the Clarity of Auditing Standards

Gerard Tremoliere, Member Background In serving the public interest, the IAASB aims to set high quality international auditing and assurance standards that are understandable, clear and capable of consistent application, thereby serving to enhance the quality and uniformity of practice worldwide. In seeking continually to improve its standards, the IAASB undertook in to review the drafting conventions used in its International Standards. The objective of the review was to identify ways to improve the clarity, and thereby the consistent application, of International Standards issued by the IAASB. Effective Date The IAASB has determined that all of its clarified standards are to be effective for audits of financial statements for periods beginning on or after December 15,

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