The International Auditing and Assurance Standards Board (IAASB) has published a report looking at whether the clarified International Standards on Auditing (ISAs) are being consistently understood and implemented as expected.
IAASB's Post-Implementation Review summarises the feedback it received from within the profession, including accountancy firms and International Federation of Accountants member bodies, and from external groups including independent audit inspection bodies and other regulators.
Most comments related to individual ISAs and included suggestions for areas where changes were needed. On ISA 200, Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with International Standards on Auditing, for example, IAASB reports that many respondents wanted to see greater emphasis on professional scepticism.
Audit inspection bodies and other regulators were concerned that the engagement quality control review (EQCR) requirements in ISA 220, Quality Control for an Audit of Financial Statements, and ISQC 1 were not sufficiently robust.
Comments on ISA 315, Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment, indicated concerns over the inconsistency in the nature and number of significant risks identified in practice, and the difficulty of meeting requirements to obtain an understanding of internal control.
IAASB also reported many concerns around ISA 600,Audits of Group Financial Statements relating to inconsistency in the degree to which the group auditor becomes involved in the work of component auditors.
IAASB chairman Professor Arnold Schilder said: 'I am pleased to note the many informative and useful comments received in response to the post-implementation review. The IAASB issued the clarified ISAs in 2009 as an essential input to audit quality, and the IAASB is committed to their continuous improvement. The report, therefore, is an important input to the IAASB's planning process, both in the short term and in the context of its 2015-2019 strategy deliberations.'
Findings from the recent research will be used as input to the IAASB's decision on commencing an additional standard-setting project in 2014. This is the second phase of IAASB's project to monitor the impact of clarified ISAs. In the first phase, undertaken in 2009 and 2010, the regulator asked auditor firms, standards-setters and others about their pre-implementation experiences.