Audit and Assurance news

The International Auditing and Assurance Standards Board (IAASB) has opened the public consultation for proposed changes to one of its fundamental standards, International Standard on Auditing (ISA) 500, Audit Evidence. The current ISA 500 addresses an auditor’s responsibility to design and perform audit procedures to obtain sufficient appropriate evidence to draw reasonable conclusions on which to base the auditor’s opinion. The proposed changes: Clarify ISA 500’s purpose and scope and explain its relationship with other standards; Provide a principles-based approach to considering and making judgments about information intended to be used as audit evidence and evaluating whether sufficient appropriate audit evidence has been obtained; Modernize ISA 500 to be adaptable to the current business and audit environment, while considering scalability for different circumstances, including the entity and the auditor’s use of technology, such as automated tools and techniques; and Emphasize the role of professional skepticism when making judgments about information intended to be used as audit evidence and evaluating the audit evidence obtained. Proposed International Standard on Auditing 500 (Revised), Audit Evidence, provides a “reference framework” for auditors when making judgments about audit evidence throughout the audit. “The audit and the environment in which an auditor conducts the audit and evaluates audit evidence has evolved significantly in recent years,” commented IAASB Chair Tom Seidenstein. “For example, the changing nature and sources of information used by the auditor and the increasing role played by technology demanded a re-examination of the audit standard. These proposed changes will ensure that the standard keeps pace, while retaining a principles-based approach to standard setting.” The IAASB invites all stakeholders to comment on the Exposure Draft via the IAASB website. Comments are requested by April 24, 2023.

ISA (Ireland) 315 (Revised October 2020), Identifying and Assessing the Risks of Material Misstatement, is effective for audits of financial statements beginning on or after 15 December 2021. The standards that have been updated to reflect the conforming amendments, including the corrections in the 2020 edition of the International Auditing and Assurance Standards Board’s Handbook, are: ISA (Ireland) 200 (Updated December 2018), Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with International Standards on Auditing (Ireland) ISA (Ireland) 210 (Revised November 2020), Agreeing the Terms of Audit Engagements ISA (Ireland) 230 (Updated December 2018), Audit Documentation ISA (Ireland) 240 (Revised October 2021), The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements ISA (Ireland) 250 Section A (Revised July 2017), Consideration of Laws and Regulations in an Audit of Financial Statements ISA (Ireland) 260 (Revised November 2020), Communication with Those Charged with Governance ISA (Ireland) 265, Communicating Deficiencies in Internal Control to Those Charged with Governance and Management ISA (Ireland) 300, Planning an Audit of Financial Statements ISA (Ireland) 315 (Updated October 2020), Identifying and Assessing the Risks of Material Misstatement ISA (Ireland) 330 (Revised August 2018), The Auditor's Responses to Assessed Risks ISA (Ireland) 402, Audit Considerations Relating to an Entity Using a Service Organisation ISA (Ireland) 500 (Updated December 2018), Audit Evidence ISA (Ireland) 501, Audit Evidence—Specific Considerations for Selected Items ISA (Ireland) 530, Audit Sampling ISA (Ireland) 540 (Revised December 2018), Auditing Accounting Estimates and Related Disclosures ISA (Ireland) 550, Related Parties ISA (Ireland) 600 (Revised November 2020), Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors) ISA (Ireland) 610, Using the Work of Internal Auditors ISA (Ireland) 620 (Revised November 2020), Using the Work of an Auditor's Expert ISA (Ireland) 701 (Revised November 2020), Communicating Key Audit Matters in the Independent Auditor’s Report ISA (Ireland) 720 (Revised November 2020), The Auditor’s Responsibilities Relating to Other Information The updated standards are available here.

IAASA has published a Consultation paper on its proposal to revise International Standard on Auditing (ISA) (Ireland) 600: Special Considerations; Audits of Group Financial Statements (including the Work of Component Auditors) and make related conforming amendments to other standards. The proposed effective date of the revised standard is for audits of group financial statements for periods beginning on or after 15 December 2023, with early adoption permitted. The purpose of this consultation paper is to obtain the views of stakeholders with regard to IAASA’s proposals to revise ISA (Ireland) 600. The consultation paper is available here. The proposed revised standard can be found here. The proposed conforming amendments can be found here. Stakeholders and interested parties are invited to provide responses to submissions@iaasa.ie by 5pm on Friday 9 December 2022.

The Financial Reporting Council (FRC) has today published its inspection findings into the quality of major local body audits in England, which includes large health and local government bodies. https://frc.org.uk/news/october-2022/frc-publishes-latest-local-audit-inspection-result

IAASA over recent weeks has published a series of videos designed to provide information on the new suite of Quality Management Standards in Ireland. The full series is available here. To accompany the video series, IAASA has published a factsheet for each Quality Management Standard available here. The new standards apply to periods from 15 December 2022. Firms must design and implement a system of quality management by that date and evaluate it for the first time by 15 December 2023. See our QM resource pages for links to the standards and further guidance.

Revisions to ISA (UK) 600 The FRC has published the revised ISA (UK) 600 (Revised September 2022) Special Considerations -Audits of Group Financial Statements (Including the Work of Component Auditors). The revisions build upon the recently revised international version of the standard, with an enhanced focus on the risk of material misstatement at the financial statement level and the need for robust communication between group and component auditors https://frc.org.uk/news/september-2022/revisions-to-isa-(uk)-600