The US Public Company Accounting Oversight Board (PCAOB) has released two consultations: a concept release on audit quality indicators (AQI), and a supplementary request on the PCAOB’s earlier proposals regarding the disclosure of the engagement partner and information on other participants in the audit.
The International Ethics Standards Board for Accountants (IESBA) has issued a ‘re-exposure’ of proposals on how professional accountants should respond to non-compliance with laws and regulations (NOCLAR).
Enhancements to International Standards are placing more focus on the auditing of disclosures.
New style audit reports are enhancing the understanding of audit and confidence in financial statements.
The IAASB has asked auditors to do more work when reviewing the annual report, drawing on all their knowledge gained during the audit.
Over the next few years, international auditing standard setter the IAASB plans to look at both current and emerging audit and assurance issues.
Going concern: is the story over yet?
New international auditing standards will transform auditor reporting worldwide.
Is there demand for assurance on corporate reporting beyond the financial statements?
EU adoption of ISAs as issued by the IAASB is finally happening. It's an important step for international consistency as not all countries have yet adopted in their national standards
Highly likely that new EU audit market legislation will be introduced later this year. But no provisions will be binding until mid-2016. Significant areas of ambiguity remain.
The IAASB is seeking views on its proposed strategic direction and work programme. In 2015-2016, the IAASB intends to focus on quality control, professional scepticism and special audit considerations relevant to financial institutions. The board will also continue to give priority to completing its project on auditor reporting this year
In mid-January, the CC announced a revised timetable for the implementation of its remedies to allow time to consider the implications of the EU's proposals. We expect a redraft of the Orders to be issued for consultation in Q3 2014
IAASB and US PCAOB consultations now closed. Remarkable consistency between different models – all add information value to users UK materiality and group scoping disclosures are not required in other models. AASB standard expected Q3 2014 – will UK align?
FTSE 350 companies must put their statutory audit engagement out to tender at least every 10 years 10 year re-tendering receives positive response from most Commission rules out mandatory firm rotation, joint auditing and restrictions on non-audit services.
The EU has agreed draft legislation that’s likely to be effective in May 2014. Mandatory audit firm rotation and restrictions on non-audit services will be required. It’s important for business to support the UK government and the FRC with sensible implementation of the options in the legislation.
Going concern is a theme in FRC, IAASB and EU audit proposals. Optimal solution is for auditors’ statement to be complementary to preparers’ explanation (FRC).
EDs envisage a more bespoke and informative auditor’s report. Both encourage experimentation to ‘test’ the key audit matters
Debate about statutory audit services at a critical stage CC says new measures will ‘ensure shareholders are better served by a more competitive market’ PwC supports many proposals but has concerns about cost/benefits of some. Competition Commission final report expected 20 October 2013
Council of Ministers continue to deliberate EU audit reforms. Wide divergence of views on key issues. Limited opportunity to express views through member state representatives.
FRC has confirmed significant changes to auditor's reports with updated ISA 700, applicable from 1 October 2012. Investors and others reacted positively to more insight. EC, IAASB, US PCAOB proposals expected – stay tuned. Consider how audit committees’ and auditor reports will change.
ECON and JURI voted on EC’s proposals – 7-year MFR rejected. Final parliamentary report and vote unlikely before end of 2013.
Entities currently applying UK GAAP have a choice of EU IFRS, IFRS with reduced disclosures or new UK GAAP. Consider an impact assessment and whether to early adopt
MEPs views differ on proposals for audit reform. Proposals include: mandatory firm rotation and closer alignment with international ethical standards. Pace of decision making remains slow.
Improvements make the framework more robust for using the work of internal auditors. FRC proposes to rule out direct use of internal audit staff. Comments due by 12 April 2013
The provisional findings have identified issues with the audit market and the CC have proposed possible remedies. Comment deadline for remedies 18 March 2013 and provisional findings 21 March 2013.
The FRC’s consultation focuses on what could be included in the audit about the audit process itself. If adopted, changes would be effective in Q4 2013. Consultation ends 30 April 2013.
Levies will rise an average of 8.5% to enable action on it s 6 priority projects. Comment due by 29 March 2013
The IAASB aims to encourage people to explore ways to improve audit quality with support from all reporting stakeholders. Consultation is likely to inform FRC refinements to its framework. Comment deadline is 15 May 2013.
Competition Commission consultation expected in Jan, If no remedies needed, final report expected in March.