Summary of IFAC Education Committee meeting held in Brasilia,



Contact: Alta Prinsloo, AltaPrinsloo@

This summary of decisions of the IAASB has been prepared for information purposes only. Except for approval of documents for public exposure and issuance of final Standards or Statements, decisions reported are tentative and reflect only the current status of discussions on projects which might change after further deliberation by the IAASB.

For more detailed information about IAASB projects, please refer to the project summaries under Current Projects

Audit Risk

The IAASB approved the following to be issued as final Standards:

• Amendments to ISA 200, Objective and General Principles of an Audit of Financial Statements

• ISA 315, Obtaining an Understanding of the Entity and Its Environment and Assessing the Risks of Material Misstatement

• ISA 330, The Auditor’s Procedures in Response to Assessed Risks

• ISA 500, Audit Evidence.

The standards are effective for audits of financial statements for periods beginning on or after December 15, 2004.

Auditor’s Report

The IAASB considered an exposure draft of the proposed revised ISA 700, The Independent Auditor’s Report on General Purpose Financial Statements, and conforming changes to the following ISAs:

• ISA 200, Objective and General Principles Governing an Audit of Financial Statements

• ISA 210, Terms of Audit Engagements

• ISA 560, Subsequent Events

• ISA 580, Management Representations

• ISA 701, Modifications to the Independent Auditor’s Report

• ISA 800, The Auditor’s Report on Special Purpose Audit Engagements.

The IAASB asked that the task force give further consideration to its comments, and present the exposure draft for approval at the December 2003 meeting.

Audit of Group Financial Statements

The IAASB considered a proposed IAPS on The Audit of Group Financial Statements, which incorporated the text of the proposed revised ISA 600, Using the Work of Another Auditor, and proposed standards and guidance on “Division of Responsibility.”

The IAASB accepted the task force’s proposal to prepare a proposed revised ISA 600, incorporating the standards and guidance on “Division of Responsibility,” and a proposed IAPS for approval as exposure drafts at the December 2003 meeting.

The Special Considerations in the Audit of Small Entities

The IAASB approved the revised IAPS 1005, The Special Considerations in the Audit of Small Entities to be issued as a final Practice Statement.

Translation of IAASB Standards and Related Practice Statements

The IAASB agreed that the proposed Policy Statement – The Translation of IAASB Standards and Related Practice Statements should be prepared on an IFAC-wide basis and that it should cover policies only. Detailed procedures should be covered in a separate document. Once finalized, both documents should be made available on the IFAC web site.

INTOSAI / IAASB Memorandum of Understanding

The IAASB requested the IAASB Chair and Staff to discuss concerns raised with INTOSAI, and to amend the proposed memorandum accordingly. The proposed memorandum will be considered for approval at the December 2003 IAASB meeting.

International Convergence

The IAASB requested IAASB Staff to present the revised proposed Policy Statement – International Convergence for consideration at the December 2003 meeting.

Assurance Engagements

The IAASB considered the proposed International Framework for Assurance Engagements (Framework) and ISAE 2000, Assurance Engagements on Subject Matters Other Than Historical Financial Information. The documents were revised based on comments received on the exposure draft and the task force’s deliberation thereof.

The IAASB asked that the task force consider its comments and present the Framework and ISAE 2000 for approval at the December 2003 meeting.

Improving the Clarity of Standards

The IAASB considered the task force’s proposals on how to improve the clarity of standards. It was noted that the proposals had been discussed with IOSCO. The task force agreed to further consider comments received from the IAASB.

The IAASB also discussed the PCAOB’s proposed Rule 3101 regarding the terms that the PCAOB proposes to use in its auditing and related professional practice standards. The IAASB agreed that staff should submit a comment letter to the PCAOB, given the short timeframe available. The letter should indicate that the IAASB is interested in aligning the terms used by the IAASB and the PCAOB, but that it is concerned about the practical implications of requiring auditor’s to document noncompliance with “should” statements.

Next Meeting

The next IAASB meeting is scheduled to be held in Berlin on December 8-12, 2003.

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IAASB Meeting Highlights and Decisions

October 2003

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