The International Auditing and Assurance Standards Board is considering a two-year hiatus on new audit standards.
IAASB chair John Kellas told the annual European SME/SMP congress in the Netherlands this month that the board “may have something to say about giving new audit standards a rest for two years” when it releases its strategy, which is due next month.
The focus of Kellas’s presentation at the congress was assurance services for SMEs. He said the issue of assurance is “coming to a head” because of issues such as regulatory pressure and complexity of standards.
Kellas said a strategy document questioning whether audit impedes other valuable services is due out soon. The document will ask questions such as whether independence requirements prevent firms from providing other services, whether other services could be more valuable in the case of limited resources and whether there is a need for an alternative assurance service for smaller entities.
Also speaking on assurance services for SMEs, the EC Internal Market Directorate General head of audit, Jürgen Tiedje, said that from his observations of the regulatory world, audit is becoming more important. Tiedje said the EC is not going to change audit thresholds and there is no “simplification project looming and none planned by European bureaucrats”.
Institute of Chartered Accountants in England and Wales technical executive director Robert Hodgkinson suggested the profession is feeling that “audit is being taken away from us” by the regulators. “We owe it to the profession to abide by the standards,” Hodgkinson said. “We have to be prepared to justify our position. We have to be seen to be adding value and we need to be ready to take the judgement of markets.”
Hodgkinson credits the accounting profession as creators of the modern audit. “The fact that regulators have finally caught up and claimed it as their own is a sign of success, not despair,” he said