International Federation of Accountants

Professional Perspectives Through IFAC Initiatives:Professional Perspectives Through IFAC Initiatives:An International Auditing and Assurance An International Auditing and Assurance

Standards Board PerspectiveStandards Board Perspective

Jim Sylph Jim Sylph Executive Director – Professional StandardsExecutive Director – Professional Standards

IFAC & EBA Joint Conference IFAC & EBA Joint Conference

TallinnTallinn

September 9, 2009September 9, 20091

•• ISA Implementation ChallengesISA Implementation Challenges

•• ISA Implementation SupportISA Implementation Support

•• Implementation MonitoringImplementation Monitoring

•• Development of Alternative Assurance/Other Development of Alternative Assurance/Other ServicesServices

•• International Standards on Assurance EngagementsInternational Standards on Assurance Engagements

Agenda

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ISA ImplementationISA Implementation

• Key principles for successful adoption and Key principles for successful adoption and implementation: implementation:

– acceptance, availability, accessibility & awarenessacceptance, availability, accessibility & awareness

• Challenges for successful implementationChallenges for successful implementation

– Adoption at national level Adoption at national level

– Education and training of usersEducation and training of users

– Updating of methodologies and audit plansUpdating of methodologies and audit plans

– Translation Translation

ISA Implementation Challenges

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ISA ImplementationISA Implementation

• IAASB Clarity Center: IAASB Clarity Center: Background and information on Clarity ProjectBackground and information on Clarity Project

– Individual ISAs and Basis of ConclusionsIndividual ISAs and Basis of Conclusions

– Staff Updates, Alerts, FAQs, Q&A, etc.Staff Updates, Alerts, FAQs, Q&A, etc.

• ISA Modules : ISA Modules :

– Short videos and supporting slides covering mShort videos and supporting slides covering main thrust of the revised ISA ain thrust of the revised ISA and significant changesand significant changes

– First release Q3 2009, free of charge from CenterFirst release Q3 2009, free of charge from Center

ISA Implementation Support

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Introduction and Overview

Overall Objectives of the Auditor

Group Audits

Accounting Estimates and Fair Values

Related Parties Communications with Those Charged with Governance and Management

ISA Implementation ISA Implementation

• IAASB is seeking feedback on implementation and IAASB is seeking feedback on implementation and effectiveness issues concerning the clarified ISAs (2009 -effectiveness issues concerning the clarified ISAs (2009 -2011)2011)

– Consultation with firms, regulators, audit oversight bodies, Consultation with firms, regulators, audit oversight bodies, IAASB National Auditing Standard Setters (NSS) & othersIAASB National Auditing Standard Setters (NSS) & others

– Capturing first-year implementation experiences of selected NSS Capturing first-year implementation experiences of selected NSS and audit firm ‘early-adopters’and audit firm ‘early-adopters’

• QuestionnaireQuestionnaire

• Differing national timetables necessitate iterative approachDiffering national timetables necessitate iterative approach

• A post-implementation review of the ISAs is planned in the A post-implementation review of the ISAs is planned in the longer term (2012 or later) longer term (2012 or later)

ISA Implementation Monitoring

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Alternatives to the AuditAlternatives to the Audit

• Project approved March 2009; Issues Papers presented at the Project approved March 2009; Issues Papers presented at the June and September 2009 IAASB meetingsJune and September 2009 IAASB meetings

• ISRE 2400 and ISRS 4410 highly relevant as exemptions ISRE 2400 and ISRS 4410 highly relevant as exemptions from statutory audit requirements increase (e.g. as in many from statutory audit requirements increase (e.g. as in many EU countries including Estonia)EU countries including Estonia)

• Priority given to revising these standardsPriority given to revising these standards

• Project considerations:Project considerations:

– ““An audit is an audit”, but … An audit is an audit”, but …

– Alternative services must be clearly distinguishable as to Alternative services must be clearly distinguishable as to level of assurance (where applicable); required work effort level of assurance (where applicable); required work effort

– Communication to promote user understanding.Communication to promote user understanding.

Standards for Alternative Assurance & Other Services: Reviews and Compilations

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International Standards on Assurance EngagementsInternational Standards on Assurance Engagements

• Approval of final ISAE expected September 2009Approval of final ISAE expected September 2009

Revision: ISAE 3402 Assurance Reports on Controls at a Third-Party Service Organization

New ISAE: Pro-forma Financial Information included in Prospective Financial Information

New ISAE: Assurance on Greenhouse Gas Statements

• Exposure draft expected December 2009

• First IAASB project in the area of sustainability assurance • Exposure draft under development

Revision ISAE 3400: Examination of Prospective Financial Information

• Project proposal December 2009

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