The International Auditing and Assurance Standards Board (IAASB) Technology Working Group today released a new non-authoritative frequently asked questions publication on using automated tools and techniques in identifying and assessing risks of material misstatements in accordance with International Standard on Auditing 315 (Revised 2019), Identifying and Assessing Risks of Material Misstatement. 

The publication assists auditors to understand the types of automated tools and techniques that can be used, and how they can be used, in performing risk assessment procedures. It also addresses considerations regarding the entity’s use of machine learning or artificial intelligence when performing risk assessment procedures.

This publication does not amend or override the International Standards on Auditing (ISAs), the texts of which alone are authoritative. Reading the publication is not a substitute for reading the ISAs.

Today the IAASB released a key takeaways publication following three recent virtual roundtables with experts and leaders exploring issues and challenges related to fraud and going concern. These roundtables focused on:

1. The impact of technology advancements on fraud perpetration and detection;
2. The “expectation gap”, or differences between public perceptions and the auditor’s responsibilities for fraud and going concern; and
3. Fraud and going concern in audits of less complex entities.

Today’s publication details the roundtables and what we heard. The input from these roundtables comprise one aspect of the IAASB’s broader information-gathering activities related to fraud and going concern that will be considered in determining possible future actions.

The full roundtable recordings, including individual breakout sessions, are available on the IAASB’s YouTube channel:

• Fraud Technology Roundtable
• Expectation Gap Roundtable
• Fraud and Going Concern Procedures in Less Complex Entities Roundtable

If you would like to know more about the IAASB’s work on fraud and going concern, please visit the project pages on fraud and going concern for further information. The IAASB also encourages all interested stakeholders to respond to the IAASB’s related Discussion Paper, Fraud and Going Concern in an Audit of Financial Statements: Exploring the Differences Between Public Perceptions About the Role of the Auditor and the Auditor’s Responsibilities in a Financial Statement Audit, which is currently open for consultation until February 1, 2021.

Fraud and going concern are important public interest issues for the IAASB. To allow adequate time for all of our stakeholders to respond to the IAASB’s Discussion Paper, Fraud and Going Concern in an Audit of Financial Statements: Exploring the Differences Between Public Perceptions About the Role of the Auditor and the Auditor’s Responsibilities in a Financial Statement Audit, the closing date of this consultation has been extended to February 1, 2021. This extension takes into account the upcoming holidays and our stakeholder’s capacity this year and is in response to stakeholder requests.

The Discussion Paper aims to gather perspectives from all our stakeholders across the financial reporting ecosystem about the role of the auditor in relation to fraud and going concern in an audit of financial statements, and to obtain input on matters about whether our standards related to fraud and going concern remain fit-for-purpose in the current environment. The input from this consultation, together with other information gathering and outreach activities, will inform IAASB decisions about possible further actions on these topics.

If you would like to know more about the IAASB’s work on fraud and going concern, including the recent roundtables on these topics, please visit the project pages on fraud and going concern. The IAASB also encourages all interested stakeholders to respond to this Discussion Paper, including investors and other users of financial statements, those charged with governance of entities, preparers of financial statements, national standard setters, professional accountancy organizations, academics, regulators and audit oversight bodies, auditors and audit firms, and others where interested.

Focusing on the effective and consistent application of our standards, the IAASB has published a new communique detailing its next steps to address complexity, understandability, scalability, and proportionality, including in the audits of financial statements of less complex entities.

The communique details the IAASB’s efforts to balance the needs of all its stakeholders by developing a separate standard focused on less complex entities while simultaneously addressing complexity, understandability, scalability and proportionality in the International Standards on Auditing more broadly.

Professional accountants make a significant contribution to the economy at the local, national and global levels. IFAC partnered with the Centre for Economics and Business Research (Cebr), one of the world’s leading economics consultancies, to get a clearer understanding of these contributions.

The results are striking.

In each measure reviewed, a greater number of accountants correlates to better economic performance. Moreover, professional accountants who are members of IFAC member professional accountancy organizations (PAOs) correlate to even stronger performance on economic indicators.

“At IFAC, we have always understood the strong connection between a well-developed accountancy profession and economic development,” said Kevin Dancey, IFAC CEO. “This research will help policymakers around the world have better informed conversations with professional accountants and PAOs about their contributions to society and potential partnerships for development and growth.”

Cebr’s analysis reviewed the accountancy profession in the G20 countries, including each individual country of the European Union. Data was assembled from a range of sources, including the World Bank, World Economic Forum, and Organisation for Economic Cooperation and Development, to establish relationships between economic variables and numbers of accountants and PAO members.

This research follows earlier projects on the positive contributions of the accountancy profession:

• Nexus 1: The Accountancy Profession, Behind the Numbers
• Nexus 2: The Accountancy Profession—A Global Value Add
• The Accountancy Profession—Playing a Positive Role in Tackling Corruption

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. IFAC is comprised of more than 175 members and associates in more than 130 countries and jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.

Ahead of the anticipated release of the International Auditing and Assurance Standards Board’s suite of new quality management standards following Public Interest Oversight Board approval later this year, the IAASB has developed implementation plans for each of the three standards. The plans explain what implementation materials stakeholders can anticipate, topics covered, and expected timing.

The International Auditing and Assurance Standards Board (IAASB) announces the following new appointments and re-appointments to take effect on January 1, 2021:

New Board Members

• Mr. Edo Kienhuis (Partner, PwC, the Netherlands, nominated by Forum of Firms)
• Ms. Diane Larsen (Deputy to the Global Quality Enablement Leader, EY, USA, nominated by Forum of Firms)
• Ms. Wendy Stevens (Partner, National Practice Leader, Quality & Risk Management, Mazars, USA, nominated by the Association of International Certified Professional Accountants)

Reappointed Board Members

• Mr. Chun Wee Chiew (Regional Head of Policy ASEAN ANZ for the Association of Chartered Certified Accountants, Singapore, nominated by ACCA)
• Prof. Kai-Uwe Marten (Director of the Institute of Accounting and Auditing at the University of Ulm, Germany, nominated by Institut der Wirtschaftsprüfer and Wirtschaftsprüferkammer in Germany)
• Mr. Fernando Ruiz Monroy (Regional Assurance Risk Management Partner, EY, Mexico, nominated by Instituto Mexicano de Contadores Públicos, A.C., in Mexico)
• Mrs. Isabelle Tracq-Sengeissen (Audit Partner, EY, France, nominated by Compagnie Nationale des Commissaires aux Comptes and Conseil Supérieur de l'Ordre des Experts-Comptables in France)

“It is a pleasure to welcome all the new members to the IAASB and congratulate re-appointed members,” said Tom Seidenstein, IAASB Chair. “The work of our volunteers is crucial to the global financial architecture, especially during these challenging times. I am eager to bring these talented professionals and their fresh perspectives into our work, and I look forward to what we will collectively accomplish.”

The IAASB also announces the appointment of Mr. Len Jui as its deputy chair for 2021. Mr. Jui, who has served as an IAASB member since 2017, is a partner at KPMG China and serves as the head of Public Policy and Regulatory Affairs.

“I am also extremely pleased that Len Jui will begin serving as deputy chair of the Board," said Seidenstein. “Len has a long history of working and volunteering for the public good, having previously served as associate chief accountant at the US Securities and Exchange Commission, a Technical Advisor on the IAASB and as an International Organization of Securities Commissions (IOSCO) representative member on the IAASB’s and International Ethics Standards Board for Accountants’ Consultative Advisory Groups. I want to also thank Robert Dohrer, Rich Sharko and in particular, Fiona Campbell, our current deputy chair, as they depart from our Board. Their insight, their talent, and their tireless dedication to the public good has left a lasting legacy.”

About the Nominating Committee
The Nominating Committee makes recommendations to the International Federation of Accountants (IFAC) Board and Public Interest Oversight Board (PIOB) on the composition of the IAASB and IESBA.

The Nominating Committee is guided in its work by the principle of selecting the most suitable person for the position. In doing so, it endeavors to balance the nominee’s abilities and professional qualifications with the representational needs of the board, such as broad regional and professional representation and gender balance. The PIOB representative observes the selection process for IAASB and IESBA memberships with regular updates to the PIOB. To learn more about the Nominating Committee, visit its web page.

About the 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). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org.

In light of the continuing effect of the COVID-19 pandemic on the International Auditing and Assurance Standard Board (IAASB)’s work plan and the capacity of our stakeholders, including recent requests to participate in consultations and events, the closing date for responses to the Auditor Reporting Stakeholder Survey has been extended to November 23, 2020.

The survey invites interested stakeholders to share their experience with, and provide feedback relating to, the Auditor Reporting Standards that were issued in 2015. This extension creates further opportunity for a broad range of input that will help the IAASB understand whether the revised Auditor Reporting Standards are achieving the intended purpose.

The IAASB appreciates the fact that different jurisdictions may be at different stages of adoption and implementation of the Auditor Reporting Standards. However, all interested stakeholders are invited to participate, regardless of where your jurisdiction is in the adoption and implementation process, since stakeholders’ perspectives and views may also be informed by, for example, early adoption activities, information gathering or field testing undertaken in preparing for implementation, research and outreach activities, and pilot testing. The online survey allows flexibility based on circumstances and experience.

The IAASB requests feedback from all stakeholders, including investors and other users of financial statements, auditors and audit firms, preparers of financial statements, those charged with governance, national standard setters, professional accountancy organizations, and regulators and audit oversight bodies.

Stakeholders also are asked to share the online survey with their respective networks in their jurisdictions that engage with auditors or use auditor reports.

Additional information about the Post-Implementation Review is available on the IAASB website.

About the 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). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org.

The International Public Sector Accounting Standards Board (IPSASB) has extended the comment period for Exposure Drafts (EDs) 70-72 to November 1, 2020 due to the COVID-19 pandemic. These three EDs, released in February this year, pioneer new approaches for some of the most prevalent public sector transactions, including government transfers and grants for the delivery of key government services to citizens.

With the fast-approaching comment deadline, stakeholders are encouraged to learn more about the Exposure Drafts, and submit their comments, by visiting the below links:

Exposure Draft 70: Revenue with Performance Obligations

Exposure Draft 71: Revenue without Performance Obligations

Exposure Draft 72: Transfer Expenses

James R. Dalkin has been re-appointed as the chair of the Consultative Advisory Group (CAG) to the International Auditing and Assurance Standards Board (IAASB), effective October 1, 2020. His appointment, approved by the Public Interest Oversight Board, follows his election by IAASB CAG members at its September 2020 meeting.

The CAG is an independent body comprising regulators, preparers, international investor and user groups, and other stakeholders with an interest in international auditing and assurance. Mr. Dalkin will continue to play a key role ensuring the CAG’s views are included in the IAASB’s deliberations. In addition, Mr. Dalkin’s past leadership and experience will be increasingly valuable as the role of the IAASB CAG may change pending possible changes to the IAASB’s governance structure following the Monitoring Group’s recommendations published in July 2020.

“It is an honor to be re-elected by my colleagues to lead the IAASB CAG,” said Mr. Dalkin. “Recognizing the ongoing review of the IAASB’s governance and operating arrangements, I look forward to the challenges and opportunities in continuing to serve the public interest in this capacity.”

“Under Jim’s leadership, the CAG worked effectively and provided valuable input to the IAASB’s standard-setting activities,” said Tom Seidenstein, IAASB Chair. “I look forward to continuing our constructive working relationship as we execute our strategy and strive to serve the public interest.”

About Mr. Dalkin
Mr. Dalkin is a Director in the Financial Management and Assurance Team with the US Government Accountability Office (GAO). He is also an observer to the Committee of Sponsoring Organizations of the Treadway Commission Advisory Board (COSO) and an adjunct professor at Georgetown University. He has previously served as a board member of the American Institute of CPAs’ Auditing Standards Board.

At the GAO, Mr. Dalkin directs work to develop and maintain government auditing standards (the Yellow Book); internal control standards for the US federal government (the Green Book); and the GAO’s work with the accounting and auditing profession. He is also responsible for the audits of the US Securities Exchange Commission and the Federal Deposit Insurance Corporation.

About the IAASB and the IAASB CAG
The IAASB is an independent standard-setting body that serves the public interest by setting high-quality international standards for auditing, quality control, review, other assurance, and related services, and by facilitating the convergence of international and national standards. In doing so, the IAASB enhances the quality and uniformity of practice throughout the world and strengthens public confidence in the global auditing and assurance profession.

The IAASB follows a rigorous due process in developing its pronouncements. Input is obtained from a wide range of stakeholders including the IAASB's CAG. Representatives of the CAG member organizations provide advice on numerous areas, including:

• The IAASB’s agenda and project timetable (work program), including project priorities;
• Technical projects; and
• Other matters of relevance to the IAASB’s activities.