Thursday, July 16, 2015

Revised of ISA addressing Disclosures in the Audit of Financial Statements

As dropped into my mail inbox by today, July 16, 2015, the IAASB has announced on July 15, 2015 the finalization of Amendments to Auditing Standards to Promote Greater Focus on Financial Statements Disclosures.

It said that the IAASB on July 15, 2015 released its revised International Standards on Auditing (ISAs), Addressing Disclosures in the Audit of Financial Statements. The revisions to the standards aim to focus auditors more explicitly on disclosures throughout the audit process and drive consistency in auditor behavior in applying the requirements of the ISAs.

As a complement to these revisions, IAASB staff has also developed a publication, Addressing Disclosures in the Audit of Financial Statements and Related Conforming Amendments, for auditors that describes financial reporting disclosure trends and their possible implications from an audit perspective and highlights how the ISAs as revised guide the auditor in addressing disclosures. This publication is intended to help the consistent, effective, and proper application of the IASs when addressing disclosures as part of an audit of financial statements, and may be particularly relevant to small and medium practices implementing the changes to the ISAs.

The IAASB firmly believes these changes to the ISAs will enhance audit quality and are capable of being applied proportionately in audits of entities of all sizes, and in all jurisdictions and sectors.

A staff-prepared Basis for Conclusions, which explains the IAASB’s rationale for its decisions, and an At a Glance document, which explains the main changes to the ISAs, are also now available.

The revisions to the standards encompass changes to 10 ISAs and conforming amendments to five other ISAs. They will be effective for audits of financial statements for periods ending on or after December 15, 2016, in line with the effective date for the new and revised Auditor Reporting Standards and ISA 720 (Revised), The Auditor's Responsibilities Relating to Other Information (HRD).