IFAC and ClimatePartner have measured the Corporate Carbon Footprint for IFAC. This measurement was based on the guidelines of the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard (GHG Protocol). This report covers the period from January 2021 to December 2021. 

To answer questions about the cost of audit and how it compares to the fees companies pay for other professional services provided by statutory auditors, the International Federation of Accountants (IFAC) today published Audit Fees Survey 2022: Understanding Audit and Non-Audit Service Fees, 2013-2020. The new study details information about audit-related, tax-related, and other non-audit professional services in the US, Canadian, and European markets across mega-cap, large-cap, mid-cap, small-cap, and micro-cap exchange-listed companies in nine industries.

“The data clearly shows differences across jurisdictions and industries, while demonstrating that fees for non-audit services appear to be on a flat or declining trend,” said IFAC CEO Kevin Dancey. “As audit quality and reform continue to be a focus for the global accountancy profession, this data provides necessary transparency and fosters understanding about the quality, cost and value of the professional services that public practice firms provide to their clients.”

This study updates an analysis first published by IFAC in 2019. IFAC also plans to update this study with fiscal year 2021 data later this year. 

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 180 members and associates in 135 countries and jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.

How much does audit cost? How does this compare to the fees companies pay for other professional services provided by statutory auditors? These questions are the starting point for this report. But when talking about listed companies in different jurisdictions and of all sizes, absolute figures may not shed meaningful comparative insight.

This paper is the fourth and final thought leadership pieces that build on a collaborative exploratory paper and global roundtable event held jointly with Chartered Professional Accountants of Canada (CPA Canada) and the Institute of Chartered Accountants of Scotland (ICAS), entitled Ethical Leadership in an Era of Complexity and Digital Change. The exploratory paper, a summary of the event, and an on-demand recording are available here.

The International Auditing and Assurance Standards Board (IAASB) today released International Standard on Auditing (ISA) 600 (Revised). The revised standard addresses special considerations that apply to audits of group financial statements (group audits). Group audits are often more complex and challenging than single-entity audits because a group may have many entities or business units across multiple jurisdictions, and component auditors may be involved. The revised standard becomes effective for audits of group financial statements for periods beginning on or after December 15, 2023.

“ISA 600 (Revised) is a significant step forward to enhance the consistent performance of quality group audit engagements and thereby supports users’ interests and broader financial stability,” said Tom Seidenstein, IAASB Chair. “Group audits is an area identified by regulators requiring attention. The changes in the standard build off other recent IAASB revisions, such as the revisions to the quality management standards, and should enhance audit quality by strengthening the accountability of group auditors and clarifying the interactive relationship between group and component auditors.”

ISA 600 (Revised) includes a robust risk-based approach to planning and performing a group audit. The approach focuses the group auditor’s attention and work effort on identifying and assessing the risks of material misstatement of the group financial statements and designing and performing further audit procedures to respond to those assessed risks. It also recognizes that component auditors can be, and often are, involved in all phases of the group audit. The standard furthermore promotes a clear, proactive and scalable approach for group audits that can be applied to today’s evolving group audit structures.

The IAASB also developed a Basis for Conclusions and factsheet to support the implementation, which are also available on the IAASB’s website.

About the IAASB
The International Auditing and Assurance Standards Board 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 IAASB is pleased to announce that its 2022-2023 Work Plan, A Public Interest Focus in Uncertain Times, has been approved by the Public Interest Oversight Board, which is a key element of the IAASB’s due process. The Work Plan was previously approved by the IAASB during its December 2021 meeting.

Sustainability and environmental, social, and governance (ESG) assurance are a prominent addition to the new work plan and will see increased time and resourcing for 2022–2023. The new Work Plan also highlights candidate topics in the Audit and Review space (e.g., responding to assessed risks of material misstatement and the impact of technology on various standards) that will be considered for a further project to begin in 2023. A key focus will remain the progression and completion of projects underway at the start of 2022, including audits of financial statements of less complex entities, audit evidence, going concern and fraud.

The International Federation of Accountants (IFAC) today released a new resource, Auditing Accounting Estimates: ISA 540 (Revised) Implementation Tool. It will help auditors implement the International Auditing and Assurance Standards Board’s International Standard on Auditing 540 (Revised), Auditing Accounting Estimates and Related Disclosures by providing an overview of steps practitioners could take and related considerations.

For entities of all types and sizes, management has to make accounting estimates, which have estimation uncertainty and may also be complex. Making these estimates involves selecting and applying a method using assumptions and data, which requires judgment. The nature, timing and extent of the audit procedures required will vary in relation to the estimation uncertainty and the assessment of the related risks of material misstatement.  

This implementation tool contains “what”, “why” and “how” suggestions. These are not all-encompassing and more or different considerations may apply depending on the circumstances of the engagement. The implementation tool also works in conjunction with the IAASB’s previously published ISA 540 (Revised) flowcharts showing the requirements flow. The choice of specific procedures an auditor decides to perform to meet the requirements of ISA 540 (Revised) and other relevant ISAs is a matter of professional judgement. This implementation tool does not replace the need to read ISA 540 (Revised), including its application and other explanatory material.

The publication is based on the Chartered Professional Accountants of Canada (CPA Canada) Implementation Tool and supports efforts to improve audit quality globally and, more broadly, international standards’ adoption and implementation. Additional guidance and resources are available on the dedicated Supporting International Standards section of the IFAC Knowledge Gateway.

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 180 members and associates in 135 countries and jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.