The International Auditing and Assurance Standards Board (IAASB) recently issued ‘clarity’ exposure drafts of:

• International Standard on Quality Control (ISQC) 1 (Redrafted), 'Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements'
• International Standard on Auditing (ISA) 220 (Redrafted), 'Quality Control for an Audit of Financial Statements'
• ISA 510 (Redrafted), 'Initial Audit Engagements – Opening Balances'
• ISA 530 (Redrafted), 'Audit Sampling'
• ISA 700 (Redrafted), 'The Independent Auditor’s Report on General Purpose Financial Statements'
• ISA 705 (Revised and Redrafted), 'Modifications to the Opinion in the Independent Auditor’s Report'
• ISA 706 (Revised and Redrafted), 'Emphasis of Matters Paragraphs and Other Matter(s) Paragraphs in the Independent Auditor’s report'

Copies of the IAASB’s exposure drafts and supplementary mapping documents can be downloaded free of charge from the IAASB’s web site (www.ifac.org/IAASB). They include details of how to respond direct to the IAASB.

To further help interested parties in the UK and Ireland understand the source of the “shall” requirements in the clarity exposure drafts, the staff of the APB have prepared versions with colour highlighting applied to identify the requirements that derive from those in the current standards and those that have been elevated from guidance text.

The APB staff’s highlighted versions of the clarity exposure drafts, together with covering papers, can be found in the Publications (IAASB Clarity Documents) section of this web site.

Richard Fleck, Chairman of APB, commented:
“These exposure drafts represent further steps in the global programme to revise auditing standards and enhance the quality of auditing. The APB would welcome comments on the exposure drafts before it responds to the IAASB.”

The comment deadlines for the exposure drafts are set out in the following table.

1. The Financial Reporting Council (FRC) is the UK’s independent regulator responsible for promoting confidence in corporate reporting and governance. Its functions are exercised principally by its operating bodies (the Accounting Standards Board, the Auditing Practices Board, the Board for Actuarial Standards, the Financial Reporting Review Panel, the Professional Oversight Board and the Accountancy Investigation and Discipline Board) and by the Council. The Committee on Corporate Governance, whose members are drawn from the Council, assists it in its work on corporate governance. 
2.  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.
3. The issuance by the IAASB of exposure drafts of revised ISAs is important to auditors and users of financial statements in the United Kingdom and Republic of Ireland as, under the new EU Directive addressing audit requirements, a process is being developed to endorse the use of international auditing standards in the EU.
4. At the same time as issuing these exposure drafts the IAASB also issued exposure drafts of: 
   •  ISA 800 (Revised and Redrafted), “Special Considerations – Audits of Special Purpose Financial Statements and Specific Elements, Accounts or Items of a Financial Statement,” and
   • ISA 805 (Revised and Redrafted), “Engagements to report on Summary Financial Statements”.

   Together, these present redrafted versions of new and revised ISAs that will eventually supersede current ISA 800 “The Independent Auditor’s Report on Special Purpose Audit Engagements”. However, the APB has not adopted ISA 800 for use in the UK and Ireland.

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