The APB today issued:

·              International Standards on Auditing (ISAs) (UK and Ireland)

·              International Standard on Quality Control (ISQC) (UK and Ireland) 1

·              Revised Statement “The Auditing Practices Board – Scope and Authority of Pronouncements”

The ISAs (UK and Ireland) apply to all audits of financial statements for periods commencing on or after 15 December 2004.  The APB’s previous standards, Statements of Auditing Standards (SASs), are applied for audits of financial statements for periods commencing before that date.  Audit firms are required to establish systems of quality control in compliance with ISQC (UK and Ireland) 1 by 15 June 2005.

On 6 May 2004 the APB announced its intention to adopt International Standards on Auditing (ISAs) and the International Standard on Quality Control (ISQC) issued by the International Auditing and Assurance Standards Board (IAASB).  The APB explained that international standards are in the process of being significantly strengthened and several key ISAs relating to audit risk, fraud and quality control had recently been revised.  The APB has contributed substantially to this work and believes that it results in improved standards for all audits which should be applied with the minimum delay.

During the period from June to October 2004 the APB issued exposure drafts of the proposed new standards.  Where necessary, the APB augmented the international standards with additional standards and guidance to maintain the requirements and clarity of the UK and Irish SASs.  This additional material is clearly differentiated from the original text of the international standards by the use of grey shading.

The APB is pleased that there was strong support for the proposed new standards.  In preparing the final standards the APB has carefully considered the answers it received to the specific questions that it asked in the consultation paper included in the exposure draft and the other issues on which commentators expressed views.  A paper providing feedback on the consultation is available on the APB’s web site.

Richard Fleck, Chairman of APB, commented:

“The adoption of the ISAs by the APB will enable audits in the UK and Ireland to benefit efficiently from the improvements to international auditing standards.  Important new standards were introduced in 2004 and work is underway to update a number of other standards, including those on materiality and accounting estimates (in conjunction with the APB) and those on audit reports, group audits, related parties and communications” 

1.            Copies of the new ISAs (UK and Ireland), ISQC (UK and Ireland), the Statement on the scope and authority of APB’s pronouncements and the Feedback Paper can be downloaded free of charge from the Publications section of the APB’s web site (www.frc.org.uk/apb):

·              For the new standards, go to the subsection “International Standards on Auditing (UK and Ireland)”

·              For the Statement on scope and authority, go to the subsection “Other”

·              For the Feedback Paper, go to the subsection “Exposure Drafts”

It is the APB’s intention to publish the standards in hard copy by the end of January 2005. Details of how this publication can be obtained will be announced in a Press Release in due course.

2.            For audits completed in compliance with the ISAs (UK and Ireland), the guidance in Practice Note 25, “Attendance at Stocktaking,” is superseded by ISA (UK and Ireland) 501, “Audit Evidence – Additional Considerations for Specific Items”.

3.            The Financial Reporting Council (“FRC”) is a unified, independent regulator. Its mission is to promote confidence in corporate reporting and governance.  The FRC incorporates five operating bodies: the Accounting Standards Board, the Auditing Practices Board, the Financial Reporting Review Panel, the Accountancy Discipline and Investigation Board and the Professional Oversight Board for Accountancy.

4.            The APB is committed to leading the development of auditing practice in the United Kingdom and the Republic of Ireland so as to:

·              establish high standards of auditing;

·              meet the developing needs of users of financial information; and

·              ensure public confidence in the auditing process.

5.      All press enquiries should be directed to: Jon Grant on Tel: 020 7492 2410.