In late July, the International Auditing and Assurance Standards Board (IAASB) opened a six-month public consultation on its landmark new proposed standard for audits of financial statements of less complex entities (LCEs).
While the IAASB encourages all interested stakeholders to respond to the consultation in writing, it recognizes that some may not have the time or resources to do so. To help, the International Federation of Accountants and the IAASB developed a survey to offer an alternative way to participate in the consultation and provide your views. The survey is open until January 14, 2022 and is available in English, French and Spanish by clicking the language selector in the survey’s top right corner.
Survey responses will be analyzed by the IAASB alongside all other feedback and help shape the final standard; individual survey responses are confidential.
New Way to Participate in the Consultation Available in English, French, Spanish
Join the IAASB for the final LinkedIn Live session discussing the recently proposed new standard for audits of less complex entities on November 17 at 8 am EST. The session will feature IAASB Member Julie Corden, LCE Reference Group Member Andrew Brathwaite, and IAASB LCE Task Force Member Brendan Murtagh discussing what the proposed new standard could mean for audit firms and practitioners that serve less complex entities, including the benefits of the standard and what firms, engagement partners and teams need to consider when deciding to use it.
The previous sessions in the series are available on LinkedIn and YouTube. The first session addressed the journey to the proposed new standard and its key principles (watch on LinkedIn or YouTube). The second session addressed for which entities the proposed standard can be used, who makes decisions regarding use of the standard, and how those decisions are made (watch on LinkedIn or YouTube).
The IAASB strongly encourages all interested stakeholders to provide their feedback on the proposed new standalone standard for audits of less complex entities by January 31, 2022. The standard is relevant to users of financial statements, owners, management, and those charged with governance of entities, preparers of financial statements, legislative or regulatory authorities, relevant local bodies with standard-setting authority, professional accountancy organizations, academics, regulators and audit oversight bodies, and auditors and audit firms, among others.
Final Discussion, What Could the Proposed LCE Standard Mean to Firms and Practitioners?, Livestreams November 17, 8 am EST
The first fully digital International Auditing and Assurance Standards Board (IAASB) handbook of pronouncements is now live on a new web application, e-International Standards (eIS). The first iteration of the platformmarks a milestone in the IAASB’s commitment to improving the usability of and access to its standards by harnessing technology. For the first time, users will be able to benefit from optimized search functions, cut and paste capabilities, and easy navigation.
“The launch of our digital standards platform responds to the demand for increased accessibility and is another step in pursuing our strategic objective of benefiting from technological innovation,” said IAASB Chair Tom Seidenstein. “Over time, we will continue to improve e-International Standards to account for user feedback and improve the usability of the platform and of the IAASB standards.”
eIS was launched by the International Federation of Accountants (IFAC) and developed collaboratively with IAASB, the International Ethics Standards Board for Accountants (IESBA), and the International Public Sector Accounting Standards Board (IPSASB). Designed to meet stakeholders’ needs, the platform allows for quick reference to other standard-setting boards’ standards and related resources, driving a strong connection between adherence to IAASB standards and the IESBA’s International Code of Ethics for Professional Accountants.
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.
Available on New Online Platform, e-International Standards
The International Auditing and Assurance Standards Board (IAASB) announces the following new appointments and re-appointments to take effect on January 1, 2022:
New Members
Mr. William Edge, Chair, Australian Auditing and Assurance Standards Board
Dr. Warren Maroun, Professor, School of Accountancy, University of the Witwatersrand, South Africa
Re-appointed Members
Mr. Kai Morten Hagen, Technical Director at Den norske Revisorforening (Norwegian Institute of Public Accountants)
Ms. Sachiko Kai, Technical Director, Japanese Institute of Certified Public Accountants
Mr. Eric Turner, Former Director, Canadian Auditing and Assurance Standards Board
"It is a pleasure to welcome the new IAASB members and congratulate re-appointed members,” said Tom Seidenstein, IAASB Chair. “One of the IAASB’s hallmarks is our diversity in thought and experiences that strengthen our deliberations. I look forward to these new voices adding to that diversity and expanding our conversations.”
The IAASB also announces the re-appointment of Mr. Len Jui as its deputy chair for 2022.
“I am also extremely pleased that Len will continue serving as IAASB deputy chair," said Mr. Seidenstein. “Len’s dedication to the IAASB is tireless and we are collectively stronger because of his efforts.”
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.
Join the IAASB for the second LinkedIn Live session discussing the recently proposed new standard for audits of less complex entities on October 20 at 8 am ET. The session will feature IAASB Member Chun Wee Chiew, IAASB Consultative Advisory Group Member Claes Norberg, and IAASB Technical Director Willie Botha discussing on which entities the proposed standard can be used, who makes decisions regarding using the standard, and how those decisions are made. They will also discuss how the standard will be received by users of the financial statements. IAASB Technical Advisor and Member of the IAASB LCE Task Force Viviene Bauer will moderate the discussion.
The third and final livestream discussion in this series will air on November 17 at 8 am ET. It will feature IAASB Member Julie Corden, LCE Reference Group Member Andrew Braithwaite, and IAASB LCE Task Force Member Brendan Murtagh discussing what the proposed new standard means for audit firms and practitioners, including the benefits of the standard, what firms, engagement partners and teams need to consider in decision making, and the potential impact on small- and medium-sized practices. The first session in the series, which addressed the journey to the proposed new standard and its key principles, is available on LinkedIn and YouTube.
The IAASB strongly encourages all interested stakeholders to provide their feedback on the proposed new standalone standard for audits of less complex entities by January 31, 2022. The standard is relevant to users of financial statements, owners, management, and those charged with governance of entities, preparers of financial statements, legislative or regulatory authorities, relevant local bodies with standard-setting authority, professional accountancy organizations, academics, regulators and audit oversight bodies, and auditors and audit firms, among others.
Second Discussion, Who Can Use the Proposed Standard and Will It Be Used, Livestreams October 20, 8 am ET
The update was made in response to questions the IAASB received on the illustrative table on page 89 of the original guide illustrating some scenarios relating to the evaluation of the firm’s system of quality management and related possible conclusions in accordance with paragraph 54 of ISQM 1. The table was intended to illustrate how the combination of various factors outlined in the table may affect what conclusion is reached. It was not intended to be definitive on the conclusions reached in each circumstance.
Given a number of questions from various sources about how to interpret the table, the following revisions were made to provide further context and clarification when evaluating the system of quality management:
The section “How the Evaluation is Undertaken, Including What Information is Considered” (pages 89–92) was revised.
Limited conforming changes were made to the section “Evaluate the Remedial Actions, and if Necessary, Take Further Action” (page 79).
The suite of quality management standards come into effect on December 15, 2022. This guide, and the first-time implementation guide for ISQM 2, do not amend or override the International Standards on Quality Management, the texts of which alone are authoritative. Reading the publications are not a substitute for reading the ISQMs. The IAASB encourages all practitioners to plan early for appropriate implementation, given the potential impact of the changes to firms’ systems of quality management.
Join the IAASB for a three-part discussion series on LinkedIn on the proposed new standard for audits of less complex entities. In the first session IAASB Chair Tom Seidenstein, IAASB Member and Less Complex Entities (LCE) Task Force Chair Kai Morten Hagen, and IAASB Deputy Director Beverley Bahlmann will address the journey to the proposed new standard, its key principles, how it compares to the existing suite of International Standards on Auditing (ISAs) and why it is important for stakeholders. The first discussion will livestream on LinkedIn on September 28 at 8 am ET.
The second livestream discussion will follow on October 20 at 8 am with IAASB Technical Director Willie Botha, IAASB Member Chun-Wee Chiew and IAASB Consultative Advisory Group Member Claes Norberg addressing on which entities the proposed standard can be used, who makes decisions regarding using the standard, and how those decisions are made. IAASB Technical Advisor and LCE Task Force Member Viviene Bauer will moderate the discussion.
The third and final livestream in this series will air on November 17 at 8 am. It will feature IAASB Member Julie Corden, LCE Reference Group Member Andrew Braithwaite, and IAASB LCE Task Force Member Brendan Murtagh discussing what the proposed new standard means for audit firms and practitioners, including the benefits of the standard, what firms and engagement teams need to consider in decision making, and the potential impact on small- and medium-sized practices.
The IAASB strongly encourages all interested stakeholders to provide their feedback on the proposed new standalone standard for audits of less complex entities by January 31, 2022. The standard is relevant to users of financial statements, owners, management and those charged with governance of entities, preparers of financial statements, legislative or regulatory authorities, relevant local bodies with standard-setting authority, professional accountancy organizations, academics, regulators and audit oversight bodies, and auditors and audit firms, among others.
First Discussion, What Makes the IAASB’s Draft Less Complex Entities Standard So Important?, Livestreams September 28, 8 am ET
ISA 540 (Revised), Auditing Accounting Estimates and Related Disclosures replacing ISA 540, Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures. The handbook also includes conforming and consequential amendments from ISA 540 to other standards, with the exception of International Auditing Practice Note 1000, which will be updated for changes to ISA 540 (Revised), and ISA 315 (Revised 2019) in the 2021 IAASB Handbook. ISA 540 (Revised) is effective for audits of financial statements for periods beginning on or after December 15, 2019.
Changes for the conforming amendments arising from the restructured International Code of Ethics for Professional Accountants, issued by the International Ethics Standards Board for Accountants, have been made in Volume 1 and 2 of the 2020 IAASB Handbook.
The following standards, which are not yet effective, have been included in the back of Volume 1 and 2:
ISA 315 (Revised 2019), Identifying and Assessing the Risks of Material Misstatement
Conforming and Consequential Amendments to Other ISAs Arising from ISA 315 (Revised 2019)
International Standard on Quality Management (ISQM) 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements
ISQM 2, Engagement Quality Reviews
ISA 220 (Revised), Quality Management for an Audit of Financial Statements
Conforming and Consequential Amendments to Other ISAs Arising from the Quality Management Projects
Coming Soon: New Online Platform for Digital Access
The first fully digital IAASB handbook will be available on a new web application, e-International Standards (eIS) soon. The platform is optimized for users through search functions, resources and references, and easy navigation. Follow the IAASB on Twitter and LinkedIn or register and subscribe via the IAASB website for launch details and announcements.
“Mapping” documents to help users navigate between existing, equivalent International Standards on Auditing and the requirements in the newly proposed International Standard on Auditing for Less Complex Entities (ISA for LCE).
The IAASB strongly encourages all interested stakeholders to provide their feedback on the proposed standard by January 31, 2022. The standard is relevant to users of financial statements, owners, management and those charged with governance of entities, preparers of financial statements, legislative or regulatory authorities, relevant local bodies with standard-setting authority, professional accountancy organizations, academics, regulators and audit oversight bodies, and auditors and audit firms, among others.
