Highlights from the IPSASB's  September 18 - 21 meeting in Toronto.

• 00:11 -- Welcome and introduction: Ross Smith, IPSASB Deputy Director
• 00:58 -- Chair’s meeting overview: Ian Carruthers, IPSASB Chair
• 03:27 -- Social Benefits, Non-Exchange Expenses, Improvements: Paul Mason, IPSASB Principal 
• 05:57 -- Revenue: Amon Dhliwayo & Joanna Spencer, IPSASB Managers
• 07:40 -- Leases: Joao Carlos Fonseca, IPSASB Principal
• 08:39 -- Public Sector Measurement: Gwenda Jensen, IPSASB Principal
• 11:09 -- Chair’s closing comments: Ian Carruthers, IPSASB Chair
• 12:49 -- Closing remarks: Ross Smith, IPSASB Deputy Director

The IAASB revised its standard on accounting estimates, ISA 540 (Revised), Auditing Accounting Estimates and Related Disclosures, to respond to the rapidly evolving business environment. The revision ensures that the standard continues to keep pace with the changing market and fosters a more independent and challenging skeptical mindset in auditors.

ISA 540 (Revised) becomes effective for financial statement audits for periods beginning on or after December 15, 2019.

The International Auditing and Assurance Standards Board (IAASB) today released International Standard on Auditing (ISA) 540 (Revised), its revised standard for the audit of accounting estimates and related disclosures.

Banks, insurers and other financial services firms have seen revolutionary change in their accounting practices as they moved to new accounting standards that changed the way they deal with loan provisions and insurance contracts. ISA 540 (Revised) reflects this rapidly evolving business environment and ensures that the standard continues to keep pace with the changing market.

This revised standard is the first to be completed as part of the IAASB’s broader program ‘Addressing the Fundamental Elements of an Audit’ and is an important part of the IAASB’s efforts to improve audit quality globally. Some of the significant revisions include:

• An enhanced risk assessment that requires auditors to consider complexity, subjectivity and other inherent risk factors in addition to estimation uncertainty. This will drive auditors to think more deeply about the risks inherent to accounting estimates.
• A closer link between the enhanced risk assessment and the methods, data and assumptions used in making accounting estimates, including the use of complex models.
• Specific material to show how the standard is scalable to all types of accounting estimates.
• Emphasis on the importance of applying appropriate professional skepticism when auditing accounting estimates to foster a more independent and challenging skeptical mindset in auditors.

ISA 540 (Revised) becomes effective for financial statement audits for periods beginning on or after December 15, 2019.

It is critical that all parties in the financial reporting supply chain, particularly regulators, national standard-setters and firms collaborate in the implementation of a standard with such far-reaching effects on the audit of financial statements. The IAASB will provide implementation support to help auditors navigate and apply the revised standard.  Please visit the IAASB website for more information.

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.

00:12 - Introduction: Diane Jules, IESBA Deputy Technical Director
00:52 - Highlights & Key Developments: Stavros Thomadakis, IESBA Chairman
04:08 - Fees: Ian McPhee, IESBA Member
06:14 - Non-Assurance Services & Rollout of the Restructured Code: Richard Fleck, IESBA Deputy Chair
09:01 - Professional Skepticism: Richard Fleck, IESBA Deputy Chair
11:45 - Alignment of Part 4B with ISAE 3000: Liesbet Haustermans, IESBA Member 
14:18 - Final thoughts: Stavros Thomadakis, IESBA Chairman
15:10 - Closing Remarks: Diane Jules, IESBA Deputy Technical Director

The IESBA has been busy this year!  Thanks to all who provided feedback on our Strategy and Work Plan, which we’ll be discussing at our meeting in New York next week, September 17-20, 2018 – check out our agenda and working papers.

Earlier this week, the IESBA Consultative Advisory Group (CAG) met in New York and provided input on our meeting materials, including project proposals for fees, professional skepticism and non-assurance services.
Register to attend the IESBA meeting! We’ll be seeing the prototype for our eCode and consider the IESBA’s priorities for the next 5 years.