Enhancing SMP Value through Assurance and Practice Management


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Presentation by Brendan Murtagh, IFAC SMP Forum June 2013

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Enhancing SMP Value through Assurance and Practice Management

  1. 1. Page 1Enhancing SMP Value throughAssurance and PracticeManagementIFAC Small and Medium Practices ForumBrendan Murtagh, IAASB MemberJune 5, 2013Kampala, Uganda
  2. 2. Page 2Hello!Enhancing SMP Value through Assurance andPractice Management
  3. 3. Page 3How IAASB Supports Needs of SMEs and SMPs• Proportionality of ISAs and ISQCs– Considerations for smaller entities built into the ISAs whereconsidered appropriate – feedback from SMPs onconsultation particularly helpful– Staff publication, Applying ISAs Proportionately with the Sizeand Complexity of an Entity– Staff publication, Applying ISQC 1 Proportionately with theNature and Size of a Firm– Framework for Audit Quality
  4. 4. Page 4• Market demands for services other than audit thatare capable of meeting the unique meets of SMEs− Review engagements− Compilation engagements− Other assurance engagements− Agreed-upon procedures engagementsHow IAASB Supports Needs of SMEs and SMPs
  5. 5. Page 5• To meet increased demand for standards as some jurisdictionsintroduced statutory requirements for reviews instead of audits• Effective for reviews of financial statements for periods endingon or after December 31, 2013ISRE 2400 (Revised) – Review Engagements
  6. 6. Page 6• Key aspects of an ISRE 2400 (Revised) reviewengagement– Limited assurance engagement– Emphasis on professional skepticism and professional judgment– Work effort primarily consists of inquiry and analytical procedures, takinginto account an understanding of the entity and its environment– Additional work if the auditor becomes aware of matters that cause thepractitioner to believe the financial statements may be misstated– Report includes a negative conclusion (i.e., “Nothing has come to ourattention”) and other language to further differentiate reviews from auditsISRE 2400 (Revised) – Review Engagements
  7. 7. Page 7ISRS 4410 (Revised) – Compilation Engagements• Aims to help practitioners performing compilation engagementconverge to the use of a globally accepted benchmark• Addresses compilation engagements that involve the issuance ofa report• Effective for compilation engagement reports dated on or afterJuly 1, 2013
  8. 8. Page 8• Key aspects of an ISRS 4410 (Revised) compilationengagement– Non-assurance engagement– Practitioner compiles financial information using the records, documents,explanations, and other information, including significant judgments, providedby management– Management accepts responsibility for these significant judgments– Report explains the purpose (and limitations) of a compilation engagementand the value contributed by the practitioner’s involvementISRS 4410 (Revised) – Compilation Engagements
  9. 9. Page 9Other Relevant Initiatives for SMPs• Ongoing revision of ISAE 3000 addressing other assuranceengagements– Expected to be approved September 2013– Can be applied by SMPs to a range of subject matters
  10. 10. Page 10Other Relevant Initiatives for SMPs• Planned revision of ISRS 4400 addressing agreed-upon procedures (AUPs) engagements– Expected to commence in early 2014– Possibility of AUPs being used with other services to create hybridengagements for SMEs
  11. 11. Page 11Other Relevant Initiatives for SMPs• ISA 700 (Proposed) - SME/SMP considerations– Listed/SME differential– Key audit matters for unlisted– Going concern statement– Internal review processes– Compliance with ethical standards
  12. 12. Page 12• IAASB Board priorities– Audit quality– ISA 720 (Other information)– Auditing disclosures– Monitoring Integrated Reporting– ISA implementation monitoring• IAASB consultation on its Strategy and Work Program for2015–2019– Consultation paper expected to be issued in early 2014– SMPs encouraged to provide feedback as to how the IAASB can continueto serve the needs of SMPsOther Relevant Initiatives for SMPs
  13. 13. www.iaasb.org