200 and six other international audit standards has brought the
International Audit and Assurance Standards Board (IASB) to three
standards away from the completion of its clarity project.
The 18-month project involved a review of all ISAs and
International Standards on Quality Control to improve their clarity
and ensure their consistent application. The final three standards
are expected to be approved by the board in December and, if passed
by the Public Oversight Board, will be applicable for audits of
financial statements for periods beginning on or after 15 December
With the end in sight, the IAASB is calling for national
standards setters, legislators and other stakeholders to ensure
their jurisdictions are ready for the implementation of the
standards by the effective date.
The international standards have received a cool reception in
Europe, which after the challenges associated with rushing through
IFRS, has decided to wait to see the final ISAs before deciding
whether to make them mandatory for all member states.
However, IAASB chair John Kellas said he hopes individual
European standard setters in most major jurisdictions will move
ahead to adopt ISAs, making an eventual EC decision a “regulatory
confirmation of the status quo”.
“That would be the ideal position if there is a delay in
commission adoption,” he said.
The UK Auditing Practices Board this month launched a
consultation asking whether it should move ahead with adopting the
new ISAs as soon as practicable or wait until they are endorsed by
Kellas noted that the UK already uses ISAs, so not upgrading to
the updated standards “could be moving from a position of high
compliance to falling back a bit”.
“I would have thought quite simply that the UK’s position as a
leading international market would suggest to me the UK would wish
to adopt the latest standards and not be running behind,” he
Of the seven most recently released ISAs, Kellas has referred to
ISA 200 (Revised and Redrafted) Overall Objectives of the
Independent Auditor and the Conduct of an Audit in Accordance with
International Standards on Auditing, as a milestone. He explained
that ISA 200 sets out and defines the way in which the clarified
standards are to be interpreted.
“It is fundamental that standard was approved for the whole
project to be able to be completed, so to that extent it is a
milestone,” he said. “It means we can go ahead and approve the
final ones with the confidence we know what the total package
The six other new ISAs are:
• ISA 320 (Revised and Redrafted), Materiality in Planning and
Performing an Audit;
• ISA 450 (Revised and Redrafted), Evaluation of Misstatements
Identified during the Audit;
• ISA 530 (Redrafted), Audit Sampling;
• ISA 610 (Redrafted), Using the Work of Internal Auditors;
• ISA 705 (Revised and Redrafted), Modifications to the Opinion
in the Independent Auditor’s Report; and
• ISA 706 (Revised and Redrafted), Emphasis of Matter Paragraphs
and Other Matter Paragraphs in the Independent Auditor’s