The revised ISA deals with the auditor’s responsibilities in an audit of financial statements relating to going concern and the implications for the auditor’s report. ISA 570 (Revised) is effective for audits of financial statements for periods ending on or after December 15, 2016.

Revisions to this ISA are as a result of new ISA 701, Communicating Key Audit Matters in the Independent Auditor’s Report. ISA 706 (Revised) deals with the auditor’s responsibility to communicate with those charged with governance in an audit of financial statements. ISA 706 (Revised) is effective for audits of financial statements for periods ending on or after December 15, 2016.

This ISA has been revised to conform to the enhanced auditor reporting requirements in ISA 700 (Revised), Forming an Opinion and Reporting on Financial Statements. Changes to this ISA relate primarily to how the form and content of the auditor’s report is affected when the auditor expresses a modified opinion. ISA 705 (Revised) is effective for audits of financial statements for periods ending on or after December 15, 2016.

New ISA 701 deals with the auditor’s responsibility to communicate key audit matters (KAM) in the auditor’s report. The ISA applies to audits of complete sets of general purpose financial statements of listed entities. It also applies when the auditor is required by law or regulation to communicate KAM for other entities or when the auditor decides to communicate KAM on a voluntary basis. ISA 701 is effective for audits of financial statements for periods ending on or after December 15, 2016.

This revised ISA deals with the auditor’s responsibility to form an opinion on the financial statements as well as the form and content of the auditor’s report issued as a result of an audit of financial statements. This ISA applies to an audit of a complete set of general purpose financial statements. ISA 700 (Revised) is effective for audits of financial statements for periods ending on or after December 15, 2016.

The International Auditing and Assurance Standards Board^® (IAASB^®) today released its new and revised Auditor Reporting Standards, designed to significantly enhance auditor’s reports for investors and other users of financial statements.

"These changes will reinvigorate the audit, as auditors substantively change their behavior and how they communicate about their work," explained Prof. Arnold Schilder, IAASB Chairman. “Informed by extensive research and global outreach to investors, regulators, audit oversight bodies, national standard setters, auditors, preparers of financial statements, audit committee members, and others, the final International Standards on Auditing (ISAs) represent a momentous—and unprecedented—first step. Now, we must study, promote, and plan for the effective implementation of the new and revised standards.”

"The IAASB has responded to calls from investors and others that it is in the public interest for an auditor to provide greater transparency about the audit that was performed," added Dan Montgomery, former IAASB Deputy Chair and Chair of the Auditor Reporting project. "Increasing the communicative value of the auditor’s report is critical to the perceived value of the financial statement audit."

The most notable enhancement is the new requirement for auditors of listed entities’ financial statements to communicate "Key Audit Matters"—those matters that the auditor views as most significant, with an explanation of how they were addressed in the audit. The IAASB has also taken steps to increase the auditor’s focus on going concern matters, including disclosures in the financial statements, and add more transparency in the auditor’s report about the auditor’s work. Information about the enhancements to auditor reporting and the ISAs that are affected can be found in the Auditor Reporting Fact Sheet.

"The introduction of Key Audit Matters for listed entities is a significant enhancement that will change not only the auditor's report, but more broadly the quality of financial reporting—and therefore the informative value to investors and other key stakeholders," said Linda de Beer, IAASB Consultative Advisory Group (CAG) Chair.  "The IAASB CAG, with its diverse membership base, has unanimously supported and encouraged the IAASB’s formidable leadership in effecting these changes."

The new and revised Auditor Reporting standards will be effective for audits of financial statements for periods ending on or after December 15, 2016. "While culminating an intense effort over the past six years, the release of the final standards is by no means the end of the IAASB’s work on the topic of auditor reporting," noted Kathleen Healy, IAASB Technical Director. "It is essential that the board and staff continue to promote awareness of these standards and facilitate their effective implementation."

To this end, the auditor reporting section of the IAASB’s website has been redesigned and updated, debuting the first components of an "Auditor Reporting Toolkit." Additional resources will be subsequently released, so users should visit the website frequently to stay abreast of the latest guidance and resource materials. The IAASB also plans to undertake a post-implementation review, which will be critical in assessing whether the standards are achieving their intended effects and whether further changes to auditor reporting are needed in the public interest.

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).

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 over 175 members and associates in 130 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

The staff-prepared Basis for Conclusions relates to, but does not form part of, the new and revised Auditor Reporting standards and related conforming amendments. It provides background for, and a summary of, the rationale for the IAASB’s conclusions.

The Call for Nominations for the Independent Standard-Setting Boards in 2016 was issued today, seeking highly-qualified individuals to serve as volunteer members for three-year terms beginning January 1, 2016. The Call for Nominations includes the International Auditing and Assurance Standards Board^® (IAASB^®), International Accounting Education Standards Board^™ (IAESB^™), International Ethics Standards Board for Accountants^® (IESBA^®), and International Public Sector Accounting Standards Board^® (IPSASB^®).

For 2016, there are 25 vacancies on the independent standard-setting boards, including the chair of the IPSASB, for which a separate Call for Applications was issued in December with a deadline of February 6. All vacancies on the boards are open for nominations by all stakeholders, including professional accountancy and international organizations, government agencies, regulators, firms, and the public. Nominations of non-accountants for the public member vacancies are strongly encouraged.

The most suitable candidates are those who are most likely to enhance the quality of the boards’ output. Factors taken into consideration include experience, a robust understanding of the international issues that affect the work of the specific board, technical skills, and knowledge of the board’s strategic objectives and current work plan. Candidates also must be proficient in English and able to commit the required time. Financial support for travel is available for those who qualify, as well as for public members.

Nominations can be submitted through the Nominations Database (instructions are included in the Call for Nominations). All applications should be submitted before March 15, 2015. Any nominations submitted after March 15, 2015 will be reviewed at the discretion of the Nominating Committee. Additional information on the Nominating Committee and its open, transparent process is available on the Nominating Committee web page.

About the IAASB
The International Auditing and Assurance Standards Board (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 IFAC.

About the IAESB
The International Accounting Education Standards Board (IAESB) develops education standards, guidance, and information papers for use by IFAC member bodies under a shared standard-setting process involving the Public Interest Oversight Board, which oversees the activities of the IAESB, and the IAESB 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 IAESB are facilitated by IFAC.

About the IESBA
The International Ethics Standards Board for Accountants (IESBA) develops ethics standards and other pronouncements for professional accountants worldwide under a shared standard-setting process involving the Public Interest Oversight Board, which oversees the activities of the IESBA, and the IESBA Consultative Advisory Group, which provides public interest input into the development of the standards and other pronouncements. The structures and processes that support the operation of the IESBA are facilitated by IFAC. Please visit www.ethicsboard.org for more information, and follow us on Twitter @Ethics_Board.

About the IPSASB
The International Public Sector Accounting Standards Board (IPSASB) develops accounting standards and guidance for use by public sector entities. It receives support (both direct financial and in-kind) from the World Bank, the Asian Development Bank, the Chartered Professional Accountants of Canada, the South African Accounting Standards Board, and the governments of Canada, New Zealand, and Switzerland. The structures and processes that support the operations of the IPSASB are facilitated by 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 2.5 million accountants in public practice, education, government service, industry, and commerce.