Confidence in Financial Reporting
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Presentation by Arnold Schilder, IAASB Chairman, at the CAPA 2015 Conference, in Seoul, Korea, October 27-29, 2015.
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Confidence in Financial Reporting
- 1. Confidence in Financial Reporting−Are the Public and Investors Receiving the Right Information and Can They Rely on It?” Prof. Arnold Schilder Chairman, International Auditing and Assurance Standards Board Plenary Session 3
- 2. CONTENTS 01. New and Revised Auditor Reporting Standards 02. Framework for Audit Quality 03. Enhancing Audit Quality – IAASB’s Priority Projects
- 3. New Auditor’s Report – Why Change Now? • Foundation for the future of global auditor reporting and improved auditor communications • Essential to the continued relevance of the audit profession globally – Audit opinion is valued, but could be more informative – Users want more relevant and decision-useful information about the entity and the financial statement audit
- 4. The New and Revised Auditor Reporting Standards
- 5. Expected Benefits of the New Auditor’s Report • Enhanced communicative value to users • More robust interactions and communication among users, auditors and those charged with governance (TCWG) • Increased attention by management and TCWG to the disclosures referred to in the Key Audit Matters (KAM) section of the auditor’s report • Increased professional skepticism in areas where KAM are identified • Increased audit quality or users’ perception of audit quality
- 6. The Decision-Making Framework for KAM Key Audit Matters
- 7. Framework for Audit Quality Key Elements • Inputs • Process • Outputs • Interactions • Contextual Factors
- 8. Work Plan for 2015–2016 – Priority Projects
- 9. Timing of Projects • Research / targeted outreach on issues to facilitate Board and Con sultative Advisory Group (CAG) discussions – March–Sept 2015 • Development of combined DP and discussions with Board and CAG (including on individual projects) – July–Dec 2015 • Issuance of DP – Dec 2015; Comment period of 150 days ending May 2016; outreach events held while DP is out for comment and possibly after • Comment analysis and discussion – May 2016–Sept 2016 • Approval of project proposals – Sept 2016 • Development of Exposure Drafts – Sept 2016–mid-2017
Editor's Notes
- Arnold to briefly highlight From a logistics perspective, this is a way to keep Chairs of the four WG and Staff, as well as an cross-section of membership of the four WGs together to ensure there is not overlap or divergence at the individual project level and ensure that the impact of different issues is considered through the lens of each individual project. Work already underway on three priority topics Quality control (ISA 220 and ISQC 1) Group audits (ISA 600) Special audit considerations relevant to financial institutions (including ISA 540 in particular) Discussion Papers (DP) initially recommended for each to Confirm completeness of issues identified Explain how the ISAs deal with the issue (or highlight gaps) Explore root causes of inspection findings and concerns, in particular to understand whether the standards need to be revisited or other actions taken to enhance auditor performance Obtain views from a wide range of stakeholders on an effective way forward to improve audit quality in relation to these topics Timing Research and targeted outreach on issues to facilitate Board and CAG discussions – March–Sept 2015 Development of combined DP and discussions with Board and CAG (including on individual projects) – July–Dec 2015 Issuance of DP – Dec 2015; Comment period of 150 days ending May 2016; outreach events held while DP is out for comment and possibly after Comment analysis and discussion – May 2016–Sept 2016 Approval of project proposals – Sept 2016 Development of Exposure Drafts – Sept 2016–mid-2017 [Note – the FI Working Group is proposing to accelerate the response to IFRS 9 ahead of the dates noted above]