Service Delivery 1. Legend. Standards and Guidance. Development of high quality pronouncements in accordance with board work plan

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1 Page 1 f 6 IAESB CAG Meeting Edinburgh, Sctland, September 16-17, 2010 Internatinal Auditing and Assurance Standards Bard 2 nd Quarter 2010 Reprt Legend On target Revised target Belw target This symbl is used if the delivery f all services in this subcategry is expected t be n target, i.e., as presented in the service delivery plan. This symbl is used when the delivery (timing r utput) f ne r mre services in the subcategry has been revised. This symbl is used when: (1) ne r mre services included in the service delivery plan are nt expected t be delivered within the year, r (2) a service is eliminated but nt replaced. Standards and Guidance Cmpliance with due prcess Develpment f high quality prnuncements in accrdance with bard wrk plan Majr Achievements Apprved expsure draft f prpsed ISA 610 (Revised), Using the Wrk f Internal Auditrs (Includes prpsed amendments t ISA 315, Identifying and Assessing the Risks f Material Misstatement thrugh Understanding the Entity and Its Envirnment). The expsure draft includes pilting f the new impact analysis apprach fr analyzing the benefits and impacts f the IAASB prpsals. (June 2010) Apprved expsure draft f Statement f Authrity f Internatinal Auditing Practice Statements (IAPSs) (June 2010) Published 2010 Handbk f Internatinal Quality Cntrl, Auditing, Review, Other Assurance, and Related Services Prnuncements (April 2010) Adptin and Implementatin 2 Delivery f implementatin supprt in accrdance with bard wrk plan Majr Achievements IAASB-Natinal Auditing Standard Setters Meeting (June 2010) 1 The Strategic Plan fr explains the link between IFAC s missin, the utcmes it strives t influence, its strategies, and its services. The utcmes, while nt entirely within the cntrl f IFAC r the accuntancy prfessin, articulate the results that IFAC seeks t influence n a brad scale. They als help define the strategies f the rganizatin. The strategies are given effect by the brad range f services indentified in the annual peratinal plan. This table prvides an verview f the status f services delivered in accrdance with the Operatinal Plan fr All presentatins and meetings are included under Representatin. Hwever, it is recgnized that many f these will supprt adptin and implementatin. Psted August 2010 Versin 1

2 Page 2 f 6 IAESB CAG Meeting Edinburgh, Sctland, September 16-17, 2010 Representatin f the Accuntancy Prfessin 2 Presentatins at and participatin in relevant events and meetings Develpment/maintenance f relatinships with key stakehlders Develpment f public plicy psitins and external submissins Majr Achievements Participated in r presented at the fllwing events: April 2010 Endurskđunardagur 2010 in Reykjavík, Iceland Fédératin des Experts Cmptables Eurpéens (FEE) / Cnsigli Nazinale dei Dttri Cmmercialisti e Degli Esperti Cntabili Small and Medium Practices and Small- and Medium-Sized Entities Cngress in Venice, Italy Internatinal Accunting Standards Bard (IASB) Expert Advisry Panel (EAP) meeting n Impairment f Financial Assets in Lndn, UK Standards Wrking Grup in Lndn, UK Transnatinal Auditrs Cmmittee/ Frum f Firms Meeting in Lndn, UK XBRL Internatinal Cnference in Rme, Italy May 2010 Australian Auditing and Assurance Standards Bard Meeting in Melburne, Australia Australian Auditing and Assurance Standards Bard Public Lecture in Melburne, Australia Australian Financial Reprting Cuncil Meeting in Melburne, Australia Australian Jint Prfessinal Bdies Lunchen in Melburne and Sydney, Australia Australian Stck Exchange Breakfast Frum in Sydney, Australia Canadian Auditing and Assurance Standards Oversight Cuncil in Trnt, Canada Glbal Reprting Initiative Cnference in Amsterdam, The Netherlands Hng Kng Institute f Certified Public Accuntants Auditing and Assurance Standards Bard Frum in Hng Kng IASB EAP meeting n Impairment f Financial Assets in Nrwalk, Cnnecticut, US New Zealand Institute f Chartered Accuntants Meeting in Wellingtn, New Zealand New Zealand Prfessinal Standards Bard Meeting in Wellingtn, New Zealand Victria University f Wellingtn Centre fr Gvernance Public Seminar in Wellingtn, New Zealand Psted August 2010 Versin 1

3 Page 3 f 6 IAESB CAG Meeting Edinburgh, Sctland, September 16-17, 2010 June th Internatinal Organizatin f Securities Cmmissins Annual Cnference in Mntreal, Canada American Institute f Certified Public Accuntants Internatinal Business, Accunting, Auditing and Tax Cnference in Washingtn, United States Canadian Institute f Chartered Accuntants Auditing and Assurance Standards Bard Meeting in Trnt, Canada Canadian Public Accuntability Bard Meeting in Trnt, Canada German Regulatrs Rundtable in Mainz, Germany IASB EAP meeting (via vide cnference) n Impairment f Financial Assets in Beijing, China IASB Standing Advisry Cuncil in Lndn, UK Institut der Wirtschaftsprüfer/ Wirtschaftsprüferkammer (Chamber f Public Accuntants) Seminar in Mainz, Germany Institut de Censres Jurads de Cuentas de España Educatin Seminar in Madrid, Spain Internatinal Crprate Gvernance Netwrk Breakfast Meeting in Trnt, Canada Internatinal Sympsium n Audit Research Cnference in Singapre Meeting (via phne) with representatives f the Financial Stability Bard (FSB) Meeting with Representatives frm rganizatins that are active in the Eurpean Unin (EU) marketplace n Eurpean Cmmissin s ISAs Adptin in Brussels, Belgium Meeting with the Eurpean Cmmissin s (EC s) Head f Auditing Unit, Nathalie de Basa in Brussels, Belgium Meeting with the Public Cmpany Accunting Oversight Bard in Washingtn, United States Ryal NIVRA Internatinal Meeting in Amsterdam, The Netherlands Submitted a respnse letter t the Internatinal Financial Reprting Standards (IFRS) (then Internatinal Accunting Standards Cmmittee) Fundatin n its expsure draft Internatinal Financial Reprting Standards Taxnmy 2010 (April 2010) Submitted a respnse letter t IASB s expsure draft n Measurement f Liabilities in IAS 37 (May 2010) Written article in The Australian Financial Review, Glbal Bdy Praises Australian Auditrs (May 2010) Written article in the Assciatin f Chartered Certified Accuntants Accuntancy Futures Magazine, Raising the Bar (June 2010) Cmmunicatins Issues f press releases; annual, quarterly and mnthly reprts; and ther cmmunicatins Maintenance f the website and related initiatives Psted August 2010 Versin 1

4 Page 4 f 6 IAESB CAG Meeting Edinburgh, Sctland, September 16-17, 2010 Majr Achievements Issued IAASB 2009 Annual Reprt (April 2010) Issued press releases t annunce the launch f the Handbk, Strategy Online Questinnaire (referred t under Prject Update), 2009 IAASB Annual Reprt and prpsed ISAE 3420, Assurance Reprts n the Prcess t Cmpile Pr Frma Financial Infrmatin included in a Prspectus. The website was updated accrdingly in all cases. Eurpean Cmmissin (EC) Adptin Psted August 2010 Versin 1 Envirnmental Issues IAASB leadership, with the supprt f FEE, met with representatives frm rganizatins active in the EU marketplace in May 2010 t discuss recent develpments regarding the EU s accunting and auditing prfessin including the annuncement by EC s Cmmissiner Barnier that a Green Paper n the EU s plicy n auditing is being prepared and is expected t be issued in September Participants nted that in view f the uncertainty created by the abve develpments, n-ging liaisn between the bdies n their respective relevant initiatives takes n greater imprtance. Participants als discussed the need fr IAASB leadership t explre pprtunities t engage with members f the EU Parliament t raise their level f awareness and understanding f the clarified ISAs and the IAASB s structure and standard-setting prcesses. IAASB leadership met with the Head f the EC s Audit Unit, Nathalie de Basaldua, in June Matters discussed at the meeting include the risks and implicatins f EC s inactin (fr example, further fragmentatin within the EU), as well as hw the clarified ISAs are able t meet the EC s bjectives n the varius issues. Financial Stability Bard (FSB) IASB leadership held a telecnference with Financial Stability Frum Secretary General, Svein Andresen and FSB Senir Advisr n Accunting and Auditing Plicy, Jerry Edwards in June The imprtance f input frm grups such as the FSB n the IAASB s Strategy and Wrk Prgram was emphasized during the call. Participants discussed matters including the FSB s pririty areas (such as risk disclsures, valuatins and related disclsures, and prvisining standards and practices) and the FSB s rle in facilitating dialgue between regulatrs, auditrs, standards setters and ther participants t explre whether differing interpretatins f the standards r perfrmance expectatins exist, key practice issues and the slutins that are being applied t enhance practice. Als discussed was the ptential fr the IAASB t further its utreach individually r tgether with ther bdies t senir experts frm key stakehlders thrugh channels such as rundtables r ther meetings fcused n imprtant tpics at varius stages in the IAASB s standards setting prcess. EC s ISAs adptin and the IAASB s relatinship with the Internatinal Frum f Independent Audit Regulatrs were als discussed. In respnse t a request by the FSB, the IAASB is currently preparing a Staff Questins & Answers publicatin which highlights cnsideratins in the ISAs that are relevant t auditing significant unusual r

5 Page 5 f 6 IAESB CAG Meeting Edinburgh, Sctland, September 16-17, 2010 highly cmplex transactins, r transactins utside the nrmal curse f business. It is intended that this will be circulated t the FSB n a brader basis after clearance by the IAASB. Internatinal Accunting Standards Bard (IASB) Liaisn As part f the IAASB-IASB liaisn initiative which cmmenced in Q4 2009, the IAASB sent a respnse letter t the IFRS (then IASC) Fundatin n its expsure draft Internatinal Financial Reprting Standards Taxnmy 2010 in April A cmment letter was als sent t the IASB n its expsure draft n Measurement f Liabilities in IAS 37 in May 2010 identifying auditability/verifiability issues with the IASB s prpsals. Further, the IAASB agreed at its June 2010 meeting new wrking grups will be set up t mnitr the IASB s prjects n extractive activities, financial statement presentatin and insurance cntracts fr identifying ptential auditability/verifiability issues. IAASB leadership met with IASB representatives including IASB Chairman, Sir David Tweedie, in July Bth Bards were cmplimentary f the gd prgress that has been made with. Participants reflected n ways t further future cllabratin including the pssibility fr establishing a jint party f the tw Bards. Public Cmpany Accunting Oversight Bard (PCAOB) Martin Baumann, PCAOB Chief Auditr and Directr f Prfessinal Standards, indicated t IAASB Chairman the PCAOB s wish t recalibrate its wrking relatinship with the IAASB with a view t appraching it mre at a strategic level. The cnsequence f this decisin is the PCAOB has withdrawn frm its fficial bserver seat at the IAASB meetings. It will, hwever, cntinue t participate at the IAASB s Cnsultative Advisry Grup meetings and IAASB-Natinal Auditing Standard Setters meetings. IFAC s Chief Executive wrte t the PCAOB t acknwledge this cmmunicatin and t reinfrce IFAC s cmmitment t wrking tgether t develp new ways fr the PCAOB and the IAASB t wrk strategically tgether mving frward. IAASB leadership subsequently met with PCAOB representatives in June 2010 t discuss key develpments and initiatives n the agendas f the tw Bards as well as ther matters f mutual interest. Representatives frm bth Bards agree that such liaisn meetings are cnstructive and shuld be held apprximately every six mnths. At the meeting, the PCAOB indicated it wuld reflect n ways fr future cllabratin and revert t the IAASB at a later stage. Future reprts will be made t the IFAC Bard in this regard later in ISA Implementatin Mnitring Prject Update The IAASB indicated in its Strategy and Wrk Prgram, , a prject t develp and implement a prcess fr assessing the effectiveness f the implementatin f the Clarity ISAs. The prject, t be undertaken in tw phases, is aimed at assisting the IAASB in determining whether thse standards need t be further refined in rder t achieve their intended bjectives. The first phase f the prject invlves btaining infrmatin regarding the implementatin f the ISAs. At its June meeting, the IAASB received a reprt frm its ISA Implementatin Mnitring Task Frce n results btained frm Phase One f the prject. The Task Frce reprted n the bserved adptin appraches amng the cuntries and firms included in Phase One. Findings indicated that the structure f the ISAs did nt appear t have psed significant challenges t adpters, and changes t the ISAs Psted August 2010 Versin 1

6 Page 6 f 6 IAESB CAG Meeting Edinburgh, Sctland, September 16-17, 2010 brught abut by the Clarity Prject are viewed as useful. The reprt als indicated thse areas f the ISAs that are psing challenges in implementatin which will input int the IAASB s cnsideratin in develping its Strategy and Wrk Prgram. The IAASB intends t publish a brief reprt summarizing these key findings later in Liaisn with key stakehlder grups will cntinue thrughut IAASB s Strategy and Wrk Prgram The IAASB launched an nline questinnaire in April 2010 t infrm the develpment f its strategic directin and related wrk prgram fr The questinnaire is the first stage f the IAASB's 18- mnth cnsultatin prcess. Thrugh the survey, the IAASB seeks feedback n the challenges facing the accuntancy prfessin, the IAASB's current strategic fcus n the develpment, adptin, and implementatin f standards, the needs f small and medium practices, and current and future prjects, amng ther tpics. Respnses t the nline questinnaire were requested by May 14, The results f the questinnaire will be used t develp a frmal Cnsultatin Paper, t be issued in December 2010, utlining the IAASB's strategic fcus and the ptential prjects that might best supprt this fcus. Pilt f Impact Analysis Apprach With the release f its expsure draft f prpsed ISA 610 (Revised) in July 2010, the IAASB is pilting an apprach fr analyzing the benefits and impacts f its prpsals. The apprach, laid ut in the explanatry memrandum t the expsure draft, is aimed at prviding a structured and transparent means fr cmmunicating t stakehlders the effects f prpsals. The pilt will help infrm the IAASB and further integrate the analysis f benefits and impacts int the standards-setting prcess. IAASB Members and Technical Advisrs Other Matters At its June 2010 meeting, the IAASB welcmed IAASB Member Jhn Archambault f Grant Thrntn wh is taking the place f Susan Jnes. It als welcmed Jan Thijs Drupsteen wh will serve as Technical Adviser t IAASB Member Ashif Kassam. Psted August 2010 Versin 1