Category: Auditing and Related Services

New Auditing Standards On the Horizon

July 2008

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New Auditing Standards On the Horizon

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If the headline above comes as news, and you want to enhance your understanding of the International Auditing and Assurance Standards Board's current programme to clarify and revise International Standards on Auditing (ISAs), then this article is intended for you.

The IAASB's suite of ISAs is used as the platform for UK Auditing Standards, which are issued by the Auditing Practices Board (APB). A common challenge levelled at these standards is that it is not sufficiently clear what the auditor is required to do. Certainly, the current standards have black type to indicate requirements, but often the accompanying text appears to signal further additional requirements. Time and energy gets used up addressing vexed questions about the extent of the auditor's responsibility. In part this is because the standards were written at different times, by different groups of people, in a variety of styles.

Since 2004, the IAASB has been working to update all ISAs in a consistent format designed to make the objective of ISAs and their specific requirements clear; this is known as the 'clarity project'. The drafting conventions now established for ISAs ensures a clear demarcation between objectives, requirements and application material. For many of the standards the work has largely, but not entirely, been a case of re-working existing ISA texts to make matters clearer. However, some standards have been fully revised or developed to incorporate new requirements and in total there are scheduled to be 35 new standards. In overall terms, clarity is about more than reshuffling existing texts, since quality thresholds are raised in some respects. Work on this project has been intensive and it is scheduled to complete by the end of 2008, with the new clarified ISAs set to replace the current standards for 2010 calendar year audits.

* This article was published in the July 2008 issue of Accountancy Magazine (p. 82-83).