As an initial response to concerns raised about situations when engagement partners are not located where the majority of the audit work is performed, including concerns raised by certain regulators and audit oversight bodies, this Staff Audit Practice Alert serves to remind auditors of the responsibilities of the engagement partner described in the International Standards on Auditing™ (ISA™).

The International Auditing and Assurance Standards Board^® (IAASB^®) today released an Exposure Draft proposing changes to International Standard on Auditing^TM (ISA^TM) 810, Engagements to Report on Summary Financial Statements. ISA 810 deals with the auditor’s responsibilities relating to an engagement to report on summary financial statements derived from financial statements audited in accordance with ISAs by that same auditor. The IAASB is proposing limited conforming amendments to ISA 810 as a result of the issuance of its new and revised Auditor Reporting standards, which address auditor reporting on general purpose financial statements.

“In light of its overall efforts to enhance auditor reporting, the IAASB believes it is also in the public interest to provide users of summary financial statements with greater transparency in circumstances when additional information, such as key audit matters, are communicated in the related auditor’s report on the audited financial statements,” explained Prof. Arnold Schilder, IAASB Chairman. “The proposed changes to ISA 810 represent a balanced approach considering the objective of an engagement to report on summary financial statements and the report that is required to be issued.”

“The board’s approach also recognizes that the manner in which summary financial statements are prepared and presented may vary on a national basis depending on the criteria used, and therefore national auditing standard setters may further tailor ISA 810 in their jurisdictions,” noted Kathleen Healy, IAASB Technical Director. “The board is therefore particularly interested in hearing from stakeholders in those jurisdictions where ISA 810 reports are frequently issued to understand whether its proposed changes will be capable of being implemented and would be expected to benefit users of these reports.”  

The IAASB has issued its proposals with a 90-day comment period in order to finalize them on a timely basis and align the effective date of ISA 810 (Revised) with the effective date of the new and Revised Auditor Reporting Standards (i.e., for audits of financial statements for periods ending on or after December 15, 2016).

How to Comment
The IAASB invites all stakeholders to respond to this Exposure Draft, which includes specific questions for respondents on key aspects of the proposals and highlights areas of focus for various stakeholders in responding to the Exposure Draft. To access the Exposure Draft and submit a comment, visit the IAASB’s website at www.iaasb.org. Comments on the Exposure Draft are requested by November 2, 2015.

About the International Auditing and Assurance Standards Board(IAASB)
The IAASB develops auditing and assurance standards and guidance for use by all professional accountants under a shared standard-setting process involving the Public Interest Oversight Board, which oversees the activities of the IAASB, and the IAASB Consultative Advisory Group, which provides public interest input into the development of the standards and guidance. The structures and processes that support the operations of the IAASB are facilitated by the International Federation of Accountants (IFAC).

About IFAC^®
IFAC is the global organization for the accountancy profession, dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. It is comprised of more than 175 members and associates in 130 countries and jurisdictions, representing approximately 2.8 million accountants in public practice, education, government service, industry, and commerce.

The IAASB has responded to the Public Company Accounting Oversight Board's (PCAOB’s) initiative to explore ways to strengthen and modernize the PCAOB’s interim standards addressing the auditor’s use of the work of specialists.

The IAASB’s response draws reference to its work to develop ISA 620, Using the Work of an Auditor’s Expert, and ISA 500, Audit Evidence, as well as current projects on its agenda that are relevant to the topic of experts.

The IAASB has responded to the Public Company Accounting Oversight Board's (PCAOB’s) initiative to explore ways to strengthen and modernize the PCAOB’s interim standards addressing the auditor’s use of the work of specialists.

The IAASB’s response draws reference to its work to develop ISA 620, Using the Work of an Auditor’s Expert, and ISA 500, Audit Evidence, as well as current projects on its agenda that are relevant to the topic of experts.