The UK Auditing Practices Board (APB)
has grabbed what it perceives to be a “window of opportunity” to
influence international decisions on changes that could be made to
the auditor’s report.

The board is seeking comments on proposed revisions to
International Standard of Auditing (ISA) (UK and Ireland) 700 – The
Auditor’s Report on Financial Statements. The new draft is intended
to facilitate a more concise report. It follows a 2007 discussion
paper that sought views on what updates were needed to reflect
changes introduced by the Companies Act 2006 and whether other
wider ranging changes should be made to the auditor’s report.

The APB noted that in response to the discussion paper, a number
of the accountancy bodies and auditing firms strongly expressed the
view that global convergence, through compliance with ISA, should
be the APB’s principal objective. Therefore, the proposed revision
has been made so it will not preclude auditors from asserting in
their audit reports that the ISA have been complied with.

The proposed revision moves UK standards towards global
convergence by requiring the auditor’s opinion on the financial
statements to be separate from other opinions required by law and
regulation. The two-part opinion is a feature of ISA 700 as issued
by the International Auditing and Assurance Standards Board

APB chair Richard Fleck commented: “The European Commission has
yet to decide on the form of auditor’s report to be used within the
EU and the IAASB has agreed to consider developments with regard to
the auditor’s report and determine what consequential action it
should take in relation to ISA 700.

“Consequently there is a window of opportunity in which the APB
believes it can most effectively influence international decisions
on the auditor’s report by moving to implement a concise auditor’s
report and commencing research to better understand what can
realistically be done to make auditor’s reports more

Comments on the draft are invited by 28 November 2008. Subject
to comments received, it is proposed that ISA (UK and Ireland) 700
(Revised) will take effect for accounting periods ending on or
after 5 April 2009.