The International Auditing and Assurance Standards Board (IAASB) and the International Ethics Standards Board for Accountants (IESBA) today welcomed the Monitoring Group’s recently released Paper: Strengthening the International Audit and Ethics Standard-Setting System, aimed at enhancing governance arrangements of the two standard-setting boards. 

The enhancements reflected in the Monitoring Group’s Paper will support the core mission of the two Boards to promulgate high quality international audit, assurance, related services and ethics standards for the accountancy profession, for worldwide application and developed in the public interest.

“The Monitoring Group’s conclusions highlight the importance of high-quality international standards, set by independent and technically expert bodies with effective oversight,” said IAASB Chairman Tom Seidenstein. “We support change that can advance our ability to deliver enhanced standards in the public interest.”  

“The task now at hand is to draw the most benefit from these changes,” said IESBA Chairman Dr. Stavros Thomadakis. “We are committed to collaborating with the Monitoring Group and others to achieve a smooth transition and effective implementation of the new arrangements.”

The Monitoring Group’s Paper encompasses items to be developed during a transition planning phase, and provides for a subsequent implementation period of approximately three years. This will allow for an orderly advancement of the Monitoring Group’s conclusions while avoiding disruption to delivery of IAASB’s and IESBA’s current Strategies and Work Plans.

For more about the International Auditing and Assurance Standard Board, visit the Board’s website at www.iaasb.org.

For more about the International Ethics Standards Board for Accountants, visit the Board’s website at www.ethicsboard.org.

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Following the issuance by the Monitoring Group July 14 of Strengthening The International Audit And Ethics Standard-Setting System (the Paper), the International Federation of Accountants (IFAC) has announced its support for moving immediately to the transition planning phase.

The Paper, which sets forth a series of recommendations to enhance the process by which global audit, assurance and ethics standards for the accountancy profession are developed and issued in the public interest, was the result of a lengthy, multi-stakeholder consultation process.

IFAC is pleased that the Paper recognizes the important and necessary role that IFAC and the profession will continue to play in the standard setting process and that the recommendations are aligned with IFAC’s strategy. There are, however, a number of important issues still to be addressed before moving forward with implementation. While IFAC does not underestimate the challenges this presents, we remain confident that we will be able to work collaboratively with all key stakeholders involved to reach a satisfactory resolution during the transition planning phase.

Dr. In-Ki Joo, President of IFAC, said, “We have worked hard to build trust and collaborate with all of the stakeholders involved in this process. The recommendations provide us with a foundation to move forward. We look forward to working with the Monitoring Group and all other stakeholders involved in the transition planning phase to agree on an implementation plan.”

Kevin Dancey, CEO of IFAC, said, “Global audit, assurance and ethics standards are the bedrock on which our profession is built, and an important safeguard in protecting the public interest that is part of our professional mandate.  We were pleased to have worked with the Monitoring Group, the Public Interest Oversight Board and other key stakeholders over the course of the consultation period to continue to enhance a sustainable, independent and transparent standard-setting process that has the trust and confidence of all stakeholders.”

The IAASB (International Auditing and Assurance Standards Board) and the IESBA (International Ethics Standards Board for Accountants) are responsible for developing in the public interest and through independent due process the standards that govern how auditors and professional accountants deliver their services.  IFAC’s key strategic priorities include supporting IAASB and IESBA and advocating for, promoting and monitoring the adoption and implementation of their standards.

 
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.

Today the IAASB released COVID-19 pandemic-related guidance on auditing accounting estimates and related disclosures. This guidance may help auditors in the current uncertain and evolving environment.

Click here to learn more.

This week the IAASB hosted two different webinars on consultations that are currently open for public comment. The recordings of these webinars can be found on the IAASB’s website as listed below.

The first webinar was hosted on June 10, 2020 and covered the current Public Consultation on Proposed Guidance: Extended External Reporting (EER) Assurance. The recording and presentation slides of this session can be found here.

The second webinar was hosted on June 11, 2020 and covered the recently released Exposure Draft of Proposed ISA 600 (Revised), Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors). The recording and presentation slides of this session can be found here.

The ISA 600 Task Force will host a second webinar on August 13, 2020 8:00 am – 9:30am EDT, where time will be spent answering questions in regard to the Proposed ISA 600 (Revised). You can submit any questions you may have to jaspervandenhout@iaasb.org till July 24, 2020.

DOWNLOAD THE ILLUSTRATIVE EXAMPLES HERE

The IAASB's International Standard on Auditing (ISA) 540 (Revised) Implementation Working Group has prepared illustrative examples for auditing simple and complex accounting estimates. The examples are designed to illustrate how an auditor could address certain requirements of ISA 540 (Revised), and have been developed to assist the auditor in understanding how ISA 540 (Revised) may be applied to:

•  Simple Accounting Estimate – Provision on Inventory Impairment
• Complex Accounting Estimate – Provision on Property, Plant and Equipment Impairment

The examples illustrate accounting estimates with varying characteristics and degrees of complexity. Each example illustrates a selection of requirements from ISA 540 (Revised). Not all requirements are addressed in each example, nor do they cover all parts of those requirements that have been selected. The requirements selected across each example vary to illustrate different aspects of ISA 540 (Revised) and to focus on those requirements that are most relevant to the example.

These examples are intended to be read together with ISA 540 (Revised). This will demonstrate how an auditor’s work effort, to comply with the requirements of ISA 540 (Revised), may be scaled down and scaled up when auditing simple and complex accounting estimates.

Click here for for more information and to view the illustrative examples. 

These examples do not constitute an authoritative pronouncement of the International Auditing and Assurance Standards Board (IAASB), nor do they amend, extend or override the ISAs or other of the IAASB’s International Standards. It is not meant to be exhaustive and reading these examples is not a substitute for reading the ISAs.

Additional illustrative examples are being developed to illustrate how an auditor may address the requirements of ISA 540 (Revised) in the context of more complex accounting estimates such as those relating to expected credit losses, and will be released in due course.

The IAASB invites you to join its webinar covering the previously released Public Consultation on Proposed Guidance: Extended External Reporting (EER) Assurance. The Consultation Paper is open for comment until July 13, 2020.

The webinar will be held on June 10, 2020 from 7am – 8.30am EDT

In this 90-minute webinar Lyn Provost, IAASB Member and Chair of the EER Task Force, will explain:

• what is meant by Extended External Reporting (EER)
• how EER Assurance engagements provide protection for the public interest
• how the IAASB’s proposed EER Assurance Guidance seeks to serve the public interest by:
• providing practical guidance on particular challenges practitioners face in performing EER assurance engagements,
• promoting consistent high-quality application of ISAE 3000 (Revised) to these engagements, and
• enhancing trust in assurance reports and engendering greater user confidence and trust in the reliability of EER reports.

Time will be provided during this webinar to answer questions. The webinar is open to preparers and users (including investors) of EER reports, as well as to assurance practitioners and regulators.

All stakeholders are invited to register and participate.

The IAASB invites you to join its webinar covering the recently released Exposure Draft of Proposed ISA 600 (Revised), Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors).  The Exposure Draft is open for comment until October 2, 2020. The webinar is scheduled for Thursday, June 11, 2020 from 8:00 am EDT.

In the 90-minute webinar, Len Jui, IAASB Member and Chair of the ISA 600 Task Force, will explain the background of the project and will take you through the key proposed revisions to ISA 600 (Revised).

Please note that some time will be provided during this webinar to answer high-level questions.  A follow-up webinar will be held in August 2020. In that webinar, participants will be provided with more time to ask questions about the Exposure Draft.

This webinar will be recorded and placed on the IAASB Website at a later date.

Click the link below to register:

• Thursday, June 11, 2020; 8:00 am - 9:30 am EDT

If you have any questions, please email Armand Kotze at ArmandKotze@iaasb.org.

On May 15, IAASB released guidance on auditor considerations when undertaking procedures relating to subsequent events, in light of the changing environment due to the COVID-19 Pandemic.

Click here to learn more.

IFAC has released the latest installment of its Exploring the IESBA Code educational series: Exploring the IESBA Code Installment 5 - Independence. The latest installment is live on a new landing page in the "Building Trust and Ethics" portion of the IFAC Website (click here). 

Exploring the IESBA Code is a twelve-month series providing an in-depth look at the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code). Each installment focuses on a specific aspect of the Code using real-world situations in a manner that is relatable and practical. Readers will gain a better understanding of the thought process behind important aspects of the Code through storytelling and expert analysis from professionals involved in developing the standards.

A professional accountant can often come across complex or challenging situations that are not black and white. These challenging situations require ethical considerations, some of which are expressly dealt with in the Code. This  unique and informational series was developed by IFAC in collaboration with the International Ethics Standards Board for Accountants (IESBA) to help explain how the Code assists in navigating some of these challenges.

To read and download this and future installments, visit the IFAC website.

Exploring the IESBA Code was published by IFAC and does not form part of the Code. It is non-authoritative and is not a substitute for reading the Code.

For more information about the Code, please click here. 

Today, IFAC published a ‘Small Business Continuity Checklist – How to Survive and Thrive Post Covid-19’.

Small businesses have been disproportionately affected by the COVID-19 pandemic. Most organizations worldwide are small in size, and the importance of small businesses to the global economy is indisputable.

COVID-19 containment measures severely impacted cashflows, disrupted supply chains and put small business survival at risk on an unprecedented scale. Governments worldwide moved quickly to deploy supportive measures for small businesses and entrepreneurs to help them maintain short-term liquidity. However, many are still struggling.

Small- and medium-sized practices (SMPs) have in-depth knowledge of their clients and provide vital guidance for navigating these uncertain times. Research indicates the business advice provided to small businesses from their professional accountant is associated with improved rates of survival, growth, improved decision-making procedures and superior financial performance.

Poor financial management is a leading reason why businesses fail. The Checklist covers key financial management and strategic management tasks, helping businesses to proactively identify and consider essential and timely information.

Many businesses are looking for the “next normal” and a new approach to resilience. Early on, the pandemic accelerated digitization and transformed small businesses responding to drastic consumer behavior shifts. A small businesses ability to survive the current environment, and thrive in the future, will be greatly strengthened by support from their professional accountant.  

The Checklist is included on IFAC’s dedicated COVID-19 web page with many other useful resources.