The International Auditing and Assurance Standards Board (IAASB) today released for public exposure proposed International Standard on Review Engagements (ISRE) 2400, Engagements to Review Historical Financial Statements. This revised standard is the second IAASB proposal in recent months that addresses the growing international need for robust standards for services that can be used by entities that are either not required or do not elect to be audited. 

“The financial statement review engagement is an important service in meeting evolving regulatory, market, and business reporting needs, in particular in the small- and medium-sized entity (SME) sector,” noted Prof. Arnold Schilder, IAASB Chairman. “The proposed standard seeks to establish clear and robust requirements governing the practitioner’s performance of a review engagement, and thus serves to fulfill its purpose of enhancing users’ degree of confidence in an entity’s financial statements.”

A review of financial statements in accordance with the proposed ISRE consists primarily of making inquiries of management and others within the entity involved in financial and accounting matters, applying analytical procedures, and evaluating the sufficiency and appropriateness of evidence obtained. The practitioner reports on whether anything has come to the practitioner’s attention that causes him/her to believe that the financial statements, taken as a whole, are not prepared in all material respects in accordance with the applicable financial reporting framework. The procedures performed in a review are substantially less than those performed in an audit, and the practitioner does not express an audit opinion.

“A financial statement review is, and should be seen as, a distinct service from a financial statement audit. It is essential that users are able to clearly distinguish between the two,” said IAASB Technical Director James Gunn. “An important aspect of the proposed standard therefore is the form and content of the practitioner’s report. The IAASB seeks comments on whether the proposed report communicates clearly to users the work performed and the limited assurance obtained in a review engagement.”

The proposed ISRE will help practitioners around the world who perform review engagements converge towards use of a globally accepted benchmark, and facilitate development of practice in jurisdictions that currently do not have national standards in this area.

How to Comment
The IAASB invites all stakeholders to comment on its proposals. To access the exposure draft or submit a comment, visit the IAASB’s website at www.iaasb.org/ExposureDrafts.php. Comments on the exposure draft are requested by May 20, 2011.

About the IAASB
The IAASB (www.iaasb.org) 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 IFAC
IFAC (www.ifac.org) 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 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

Notes to Editor:
In October 2010, the IAASB released proposed International Standard on Related Services (ISRS) 4410, Compilation Engagements.

The International Auditing and Assurance Standards Board (IAASB) today released for comment proposed new International Standard on Assurance Engagements (ISAE) 3410, Assurance Engagements on Greenhouse Gas Statements.

“The monetary value of carbon trading transactions around the world is in the billions and continuing to increase exponentially. This has led to a strong and growing need for mechanisms to enhance the reliability of the underlying information used in these transactions—and this proposed standard is an important part of fulfilling that need,” said Prof. Arnold Schilder, IAASB chairman. “Disclosure of emissions information is also increasingly being required by regulation or presented on a voluntary basis to inform investors, consumers, and others,” Schilder added. “For example, it is becoming more common to include detailed emissions information in company sustainability reports. Providing assurance to enhance the reliability of information for regulatory and voluntary reporting is also important.”

Proposed ISAE 3410 has been developed through a robust program of consultation, including a series of global roundtables and feedback received on an earlier Consultation Paper. The proposed standard addresses the practitioner’s responsibilities in identifying, assessing, and responding to risks of material misstatement, and contains illustrative assurance reports on greenhouse gas statements. The proposed requirements and guidance also recognize that most engagements will be undertaken by a multidisciplinary team, so they address the need for the assurance practitioner to integrate experts—in engineering or environmental science, for example—into various stages of the engagement.

“The proposed standard can be applied to a broad range of circumstances, including emissions from electricity used at a single office; emissions from complex physical or chemical processes at several facilities; or emissions calculated using information from multiple entities in a supply chain,” explained IAASB Technical Director James Gunn. He noted, “Importantly, the proposed standard covers both ‘reasonable assurance’ and ‘limited assurance’ engagements for both of which demand is increasingly evident in the marketplace.”

How to Comment
The IAASB invites all stakeholders to comment on its proposals. To access the exposure draft or submit a comment, visit the IAASB’s website at www.iaasb.org/ExposureDrafts.php. Comments on the exposure draft are requested by June 10, 2011.

About the IAASB
The IAASB (www.iaasb.org) 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 IFAC
IFAC (www.ifac.org) 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 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

The International Auditing and Assurance Standards Board (IAASB) today released for comment its Proposed Strategy and Work Program for 2012–2014. The Consultation Paper was developed with input from the IAASB’s April 2010 strategy survey and other consultation and outreach activities. It highlights issues facing the accounting profession and suggests priority activities for the IAASB during 2012–2014.

The IAASB is proposing to remain focused on three strategic areas:

• Developing and revising standards and pronouncements;
• Monitoring and facilitating adoption of those standards; and
• Responding to implementation concerns and improving the consistency of the standards’ practical application.

Prof. Arnold Schilder, chairman of the IAASB, noted, “An important consideration in setting the IAASB’s work program is determining an appropriate balance between ensuring that the clarified International Standards on Auditing are successfully implemented and kept up to date, while also supporting new and emerging assurance services and addressing the needs of small and medium entities and practices. Therefore, it will be essential for stakeholders to signal where they believe the IAASB’s time, in the public interest, should be spent.”

A number of issues identified in the initial strategy consultation are already being addressed in the IAASB’s current work program. As outputs of its December meeting, the IAASB will be releasing a number of publications over the next several weeks, including: exposure drafts of proposed International Standard on Assurance Engagements 3410, Assurance on Greenhouse Gas Statements and revised International Standard on Review Engagements 2400, Engagements to Review Historical Financial Statements; a Discussion Paper entitled The Evolving Nature of Financial Reporting: Disclosure and Its Audit Implications; and a publication entitled Audit Quality: An IAASB Perspective to stimulate further thought and discussion on the topic amongst stakeholders.

“The Proposed Strategy and Work Program for 2012–2014 reflects a continued focus on these and other important projects currently underway,” said IAASB Technical Director James Gunn, adding, “At the same time, it also looks forward more broadly and seeks views on other new initiatives to fulfill the IAASB’s public interest mandate.”

How to Comment
The IAASB invites all stakeholders to comment on its proposed strategy and possible actions to implement the proposed strategy. To access the Consultation Paper or submit a comment, visit the IAASB’s website at www.iaasb.org/ExposureDrafts.php. Comments on the Consultation Paper are requested by April 4, 2011.

About the IAASB
The IAASB (www.iaasb.org) 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 IFAC
IFAC (www.ifac.org) 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 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

My Lord Mayor, CIPFA President Jaki Meekings Davis, Distinguished Guests, Ladies, and Gentlemen.  Thank you, Jaki, for your kind introduction and for your welcome to this marvelous occasion, being held in such a historic building.

125 years - 1885 to 2010. 1885, apart from being the year in which CIPFA was founded and incorporated not long after as the Corporate Treasurers and Accountants Institute, it was also the year of the first election in which the electoral franchise in England was extended to all men; and the audience tonight evidences significant further progress in this regard!  In the same year professional football was legalized in Britain and, close to my heart, it was the year in which Gottfried Daimler patented the first motorcycle. A memorable year!

The IAASB has expressed support for the continued development and enhancement of taxonomies for IFRS and IFRS for Small and Medium-sized Entities (SMEs) following due process and broad international consultation. The IAASB will be following the progress of the IASC Foundation's work in this area with interest, in particular as it relates to the IAASB's project on XBRL.

The IAASB has expressed support for the FSB's work in this area, and will be following its progress, in particular as it relates to the IAASB's projects on auditing financial statement disclosures, the auditor's responsibilities relating to other information, the auditor's report, and audit quality.

The IAASB has provided comments on matters raised in the Green Paper that are directly within the remit of the IAASB. The IAASB will be following the progress of the European Commission's consultation on its Green Paper with interest, in particular as the IAASB works to develop its 2012-2014 strategy and work program.

The IAASB formalized the process by which it monitors developments in financial reporting standards, one goal of which is to provide the International Accounting Standards Board (IASB) with timely input on aspects of its proposed standards that may have potential verifiability or auditability issues. For this purpose, a working group consisting of IAASB members and technical advisors has been formed to monitor selected IASB projects.