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.

Generation Z, those born from the mid-1990's to the mid-2000's, are soon to enter the workforce. A survey of 3,300+ Gen Z'ers across G20 countries examines this generation's views on public policy and the workplace. 

The survey finds that Gen Z is concerned for the economy and their job prospects. Globally, Gen Z'ers identified economic stability, job opportunities and quality education as their top public policy priorities. 

When it comes to their career expectations, Gen Z seeks a stable career, competitive salary and benefits and work-life balance.

• 51% of Gen Z feel it is important for their government to prioritize a national approach to policy, while 32% prefer a globalist approach.
• Gen Z’s top career priorities include: a stable career path (89% important or very important), competitive salary and benefits (87%), and work-life balance (84%).
• 73% of Gen Z respondents would consider a career in professional accountancy, and over one fifth (21%) have already decided to pursue an accounting career.

NEW YORK, SEPTEMBER 25, 2018 – Generation Z (Gen Z) is concerned for the economy and their job prospects, according to a new survey published today by IFAC (International Federation of Accountants), the voice of the global accounting profession. The survey of over 3,300 individuals aged 18-23 across 19 G20 countries takes the pulse of next-generation attitudes on public policy and career expectations.

Understanding Gen Z priorities will be critical for policy makers and employers alike, as public policy debates increasingly confront inter-generational trade-offs in wealth and as Gen Z is set to comprise the world’s largest generation.

Politically Engaged, Economically Conservative
This generation’s top public policy priorities are advancing economic stability, quality education, and job availability. However, views on how to achieve desired outcomes depend on geography. The survey found 51% of Gen Z’ers globally favor a nationalist approach to public policy, while 32% favor globalism and international collaboration.

Gen Z’ers in France (52%) and Germany (43%) most strongly support international policy collaboration, while preference for a nationalistic approach to public policy is strongest in China (65%), South Africa (63%), India (60%), and Russia (59%).

“Gen Z views appear to reflect the tension between national protectionism and global policy cooperation playing out in contemporary geopolitical and economic debates,” said Russell Guthrie, IFAC Executive Director. “The emphasis on economic stability speaks volumes about what the future will hold, given that this generation is already exercising its active and passionate voice on the global stage.”

Beyond the clash between national protectionism and globalization, other concerns include healthcare, especially in Canada, France, Germany and the U.S., and tackling systematic corruption, which was rated a top priority by respondents in Argentina, Brazil, India and Indonesia.

Desire Job Security in Stable Professions
Gen Z’s desire for stability is also apparent in its workplace expectations. They anticipate digitalization and emerging technology to be a double-edged sword, bringing new ways of working but also the decline of traditional jobs as a result.

Contrasted with the “live the dream at all costs” outlook commonly attributed to the preceding Millennial generation, Gen Z’s top priorities in choosing a career include a stable career path (89% important or very important), competitive salary and benefits (87%) and work-life balance (84%).

Gen Z’s perception of professional accountancy is highly aligned with its top two priorities in choosing a career. 87% of Gen Z see professional accountancy as attractive or very attractive in offering a stable career path, while 86% see the profession as meeting or exceeding their salary and benefits expectations.

Nearly three-quarters (73%) of Gen Z respondents would consider a career in professional accountancy, and over one fifth of respondents (21%) indicate that they have already decided to pursue a career in the profession.

“Generation Z brings a great wealth of new and unique talent to the global workforce. This survey identifies why the global accounting profession is well positioned to attract and retain next-generation talent, particularly as the role of the accountant becomes ever more strategic,” said Fayezul Choudhury, IFAC CEO. “Employers from all industries would be well suited to understand Gen Z perspectives as they come to shape the future of the workplace.”

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Survey Method
For this study, Generation Z is defined as individuals born between the mid- 1990s and mid-2000s. Conducted by IFAC, this study gives voice to 3,388 individuals between the ages of 18 and 23 in G20 countries. This represents a sample size of 150-300 participants from: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the UK, and the US.

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 more than 130 countries and jurisdictions, representing almost 3 million accountants in public practice, education, government service, industry, and commerce.