Chartered Accountants Audit Conference

Susan Fraser, CA

Senior Project Manager

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International Auditing and Assurance Standards Board (IAASB)

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IAASB

• Why interested?

Australian Government & CLERP 9 ASIC Act 2001 Financial Reporting Council (FRC)

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IFAC (International Federation of Accountants)

• Composition

• Established – 30 years

• ISAs - worldwide

• SMPs/SMEs

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IAASB Direction 2009 - 2011

• Overall Objectives

• Initiatives

• Proposed Strategy Areas of focus

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IAASB Areas of Focus 2009 - 2011

• Performance Standards

• Sustainability Standard

• New Technologies

• IAPS

• Other Matters

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Contact

• AUASB / IAASB

• The Future

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Questions?

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AUASB Strategic Direction and Work Plan

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Strategic Direction

• What is our strategic direction, as outlined by the FRC in 2005?

Public interest Principles based audit Risk based audit approach

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Strategic Direction

• How do we achieve this? Auditing Standards [ASA] Assurance Standards [ASAE, ASRE] Guidance Statements [GS] Participate in local & international standard

setting activities

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Strategic Direction

• How does it compare with the overall IAASB strategy?

Complementary

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AUASB Work Plan

• Main Project = ASA Redrafting [ISA Clarity]

October 2007 announcement Application period Expected release date “ISA Plus” policy

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ASA Redrafting – Approach

• Use the clarified ISA as the base ASA • Change for 3 main reasons:

Legal and/or regulatory requirements Legislative instruments “Clear public interest”

Editorial and format changes

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ASA Redrafting & You

• What does this mean for you?

Yes, more change

Benefits: Alignment to International Standards [best practice] Consistent application [world-wide] Clarity of Obligation

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ASA Redrafting - Points to note

• Timetable is dependent on IAASB schedule

• “Redrafted” v “Revised and Redrafted”

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Work Plan

• Other Projects for 2008-2009

Review of current Pronouncements “Public interest” areas Australian Regulatory changes International standard-setting activities

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Questions?

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The legally enforceable Auditing Standards one year on………..

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Background

• “Force of Law” introduced 1 July 2006 CLERP 9 reform Codification of existing standards (AUSs) No fundamental change to audit

Requirements

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Findings

• Increased awareness of standards

• Still a way to go

• Documentation

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Some Issues for the Audit Profession

• Documentation

• Training

• SME – differing opinions

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Issues - Documentation

• Documentation - too little/too much/not relevant

• “If it hasn’t been documented, it hasn’t been done”

• Documentation - the key to supporting the audit opinion

• Know what you are required to document

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Issues - Training

• Audit is a specialised skill area

• Staff & Management training critical

• Your business success depends on how you train & invest in your people

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Issues - SMEs Differing Opinions

• SMEs: Size, complexity & application of accounting

and auditing standards Appropriateness of required audit

procedures & documentation levels An “Audit is an audit” principle

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Input welcome at AUASB

• AUASB technical team Background in audit

• Accessible to all

• Input and Feedback welcome

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Questions?

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Conducts of Audits ....The Future

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Our Thoughts – The Future

• Trends

• Some key Drivers Business Environment Litigation Risk Regulation

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Drivers - Business Environment

• Developments Business Structures Operations Funds Technology SME space

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Drivers - Litigation

• Expectation Gap Responsibilities Assurance Independence

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Drivers - Risk

• Business changes

• Audit Approach

• Decisions – balancing risk

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Drivers - Regulation

• Increased regulation Legitimacy

• Minimum Standards

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The Future - Summary

• Messages

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Conducts of Audit……The Future

• Focus

• Challenges

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Conducts of Audit……The Future

• Challenges The Audit Practice

Training Recruit & Retain Communications Overload

Lobbying

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Conducts of Audit……The Future

• Messages

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Questions?

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