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International Federation of Accountants

International Federation of Accountants. International Standards on Auditing An overview John Kellas, IAASB Chairman. World Bank APAAR Module 16 17 January 2006. Agenda. About the IAASB Europe and International Standards on Auditing (ISAs) Overview of ISAs Current projects. Mission.

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International Federation of Accountants

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  1. International Federation of Accountants International Standards on Auditing An overview John Kellas, IAASB Chairman World Bank APAAR Module 16 17 January 2006

  2. Agenda • About the IAASB • Europe and International Standards on Auditing (ISAs) • Overview of ISAs • Current projects

  3. Mission About the IAASB • Serve and protect the public interest • Establish high-quality standards on quality control, auditing, review, other assurance and related services • Facilitate international convergence

  4. Composition and Oversight About the IAASB • 18 members, including 3 public members • Technical advisors • Three observers – Japanese FSA, US PCAOB and European Commission • IAASB Consultative Advisory Group (CAG) • Public Interest Oversight Board (PIOB)

  5. The PIOB About the IAASB • Independent board overseeing IFAC’s standard-setting activities and work programmes • Members appointed by regulators • Approves terms of reference for IAASB / IAASB CAG • Approves nominations • Approves due process for standard-setting activities

  6. KEY ACCOUNTABILITY OVERSIGHT CONSULTATION/ADVICE

  7. What PIOB is not responsible for • Monitoring professional work • Technical aspects of standards • But – it’s views may be very influential

  8. Standard Setting Process About the IAASB • Transparency • Public meetings • Materials available on website • Due process • PIOB opinion on work program • Consideration of need for public forum/consultation paper • 120 day exposure period (ordinarily) • Comments deliberated on / need for re-exposure considered • 2/3rds approval required • Reporting on whether due process has been followed

  9. Europe and ISAs • 8th Directive regulates statutory audit in Europe • Revised Directive effective early 2006 • Member States have 2 years to implement • Requires use of ISAs – when endorsed

  10. Endorsement of ISAs • Mechanism not yet settled • Oversight of standard setting a precondition of adoption of ISAs by the EC • Europe’s oversight bodies have a key role to play in the adoption process • Role of the profession in endorsement process?

  11. IAASB Pronouncements • Standards – primarily ISAs but also for other assurance and related services • Practice Statements – provide guidance on implementation and promote good practice • Other – not authoritative

  12. Overview of ISAs • General principles and responsibilities • Risk assessment and responses to risk • Audit evidence • Using work of others • Audit conclusions and reporting

  13. IAASB’s work programme • Clarity project • Important projects at post-ED stage: - Communication with those charged with governance - Materiality - Estimates - Group audits

  14. Other active projects • Related parties • Management representations • Using the work of an expert • Confirmations • Service organisations

  15. Other project possibilities • Material weaknesses in internal control • XBRL • Other assurance possibilities?

  16. International Federation of Accountants www.ifac.org January 2006

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