The document discusses how the IAASB supports SMEs and SMPs through its standards and initiatives. It outlines the proportionality built into ISAs and ISQCs for smaller entities. It also describes recently revised standards for review engagements (ISRE 2400) and compilation engagements (ISRS 4410) to meet increased demand. Other initiatives discussed include revisions to ISAE 3000 and planned revisions to ISRS 4400. The document concludes with an overview of other IAASB priorities and its upcoming consultation on strategy.

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Enhancing SMP Value through
Assurance and Practice
Management
IFAC Small and Medium Practices Forum
Brendan Murtagh, IAASB Member
June 5, 2013
Kampala, Uganda

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Hello!
Enhancing SMP Value through Assurance and
Practice Management

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How IAASB Supports Needs of SMEs and SMPs
• Proportionality of ISAs and ISQCs
– Considerations for smaller entities built into the ISAs where
considered appropriate – feedback from SMPs on
consultation particularly helpful
– Staff publication, Applying ISAs Proportionately with the Size
and Complexity of an Entity
– Staff publication, Applying ISQC 1 Proportionately with the
Nature and Size of a Firm
– Framework for Audit Quality

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• Market demands for services other than audit that
are capable of meeting the unique meets of SMEs
− Review engagements
− Compilation engagements
− Other assurance engagements
− Agreed-upon procedures engagements
How IAASB Supports Needs of SMEs and SMPs

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• To meet increased demand for standards as some jurisdictions
introduced statutory requirements for reviews instead of audits
• Effective for reviews of financial statements for periods ending
on or after December 31, 2013
ISRE 2400 (Revised) – Review Engagements

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• Key aspects of an ISRE 2400 (Revised) review
engagement
– Limited assurance engagement
– Emphasis on professional skepticism and professional judgment
– Work effort primarily consists of inquiry and analytical procedures, taking
into account an understanding of the entity and its environment
– Additional work if the auditor becomes aware of matters that cause the
practitioner to believe the financial statements may be misstated
– Report includes a negative conclusion (i.e., “Nothing has come to our
attention”) and other language to further differentiate reviews from audits
ISRE 2400 (Revised) – Review Engagements

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ISRS 4410 (Revised) – Compilation Engagements
• Aims to help practitioners performing compilation engagement
converge to the use of a globally accepted benchmark
• Addresses compilation engagements that involve the issuance of
a report
• Effective for compilation engagement reports dated on or after
July 1, 2013

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• Key aspects of an ISRS 4410 (Revised) compilation
engagement
– Non-assurance engagement
– Practitioner compiles financial information using the records, documents,
explanations, and other information, including significant judgments, provided
by management
– Management accepts responsibility for these significant judgments
– Report explains the purpose (and limitations) of a compilation engagement
and the value contributed by the practitioner’s involvement
ISRS 4410 (Revised) – Compilation Engagements

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Other Relevant Initiatives for SMPs
• Ongoing revision of ISAE 3000 addressing other assurance
engagements
– Expected to be approved September 2013
– Can be applied by SMPs to a range of subject matters

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Other 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 hybrid
engagements for SMEs

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Other 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

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• 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 for
2015–2019
– Consultation paper expected to be issued in early 2014
– SMPs encouraged to provide feedback as to how the IAASB can continue
to serve the needs of SMPs
Other Relevant Initiatives for SMPs

13. www.iaasb.org