Agenda Item 1-A. IAASB Future Strategy Survey

Transcription

1 IAASB Telecnference (April 18, 2018) Agenda Item 1-A IAASB Future Strategy Survey This Agenda Item presents the Stakehlder Survey fr the develpment f the IAASB s Strategy fr in a Wrd frmat. Once the IAASB has agreed the wrding, the survey will be published in a survey tl, which will prvide a mre interactive survey. Accrdingly, text that will appear as hver bxes has been shwn as cmment bxes, and further explanatry ntes, as necessary, have been presented in [italics] in this versin. Purpse f the Survey and Why It Is Imprtant? The Internatinal Auditing and Assurance Standards Bard s (IAASB) strategy cnsultatin prcess fr the perid starts with this stakehlder survey 1 in rder t help identify key issues fr cnsideratin in develping its future strategy. The IAASB is appraching the develpment f its future strategy and wrk plans, including hw it undertakes its activities, with a very pen mind. Therefre input that is insightful r influential in shaping the directin f its future strategy, r which may help identify emerging develpments r trends that are likely t be imprtant in the public interest in the future, is particularly welcme. Cmmented [BB1]: Pp-Up bx: The perid f the strategy has changed t 4 years t align with the end f the strategy perid fr the Internatinal Ethics Standards Bard fr Accuntants The input frm this survey, as well as direct engagement with a wide range f stakehlders thrugh utreach effrts, including fcus grups, will infrm the develpment f the IAASB s Cnsultatin Paper n its future Strategy and Wrk Plans, expected t be released at the end f The Cnsultatin Paper will cntain a mre rbust descriptin f the matters addressed by the survey, and will slicit cmments in the frm f written respnses frm stakehlders. Backgrund What des the IAASB D, and What Are Its Standards? The bjective f the IAASB is t serve the public interest by setting, independently and under its wn authrity, high-quality auditing, assurance, and ther related standards (described further belw). The IAASB als seeks t facilitate the cnvergence f internatinal and natinal standards. These bjectives cntribute t enhancing quality and cnsistency f practice thrughut the wrld, and strengthening public cnfidence in the glbal auditing and assurance prfessin. The IAASB sets its internatinal standards under the versight f the Public Interest Oversight Bard, and with the advice f its Cnsultative Advisry Grup, which prvides public interest input int the develpment f the standards. The IAASB s Standards and Other Prnuncements The internatinal standards develped by the IAASB cver a brad range f engagements, including: Audits and reviews f histrical financial infrmatin. 1 The IAASB fllws with great interest the cnsultatin currently underway by the Mnitring Grup (MG) n the IAASB s structure, gvernance and versight, with changes that will likely impact the strategy perid. The IAASB still believes it is imprtant t cntinue with the strategy develpment prcess in light f the imprtance f the smth cntinuatin f the IAASB s activities until and during any changes resulting frm the MG cnsultatin. Cmmented [BB2]: Pp-up bx: The auditing standards address an audit f an entity s financial statements by an independent auditr. The applicable IAASB standards are the Internatinal Standards n Auditing (ISAs). Review standards address the review f an entity s financial statements by a prfessinal accuntant in public practice, and the review f interim financial infrmatin by the independent auditr f the entity. The applicable IAASB standards are the Internatinal Standards n Review Engagements (ISREs). Prepared by: Bev Bahlmann (April 2018) Page 1 f 14

2 Other Assurance engagements (ther than audits r reviews f histrical financial infrmatin), including engagements related t Emerging Frms f External Reprting (EER). Related Services engagements. The IAASB als establishes Quality Cntrl standards t be applied by firms fr all services falling under the IAASB s engagement standards. In additin, the IAASB may issue guidance in the frm f nn-authritative material. What Has Influenced the IAASB s Activities ver the Last Ten Years? In March 2009, the IAASB cmpleted its Clarity Prject that invlved a cmprehensive review f all the ISAs t imprve their clarity and thereby facilitate their cnsistent applicatin. Apprximately half f the clarified ISAs included substantive changes aimed at imprving practice in a variety f respects. In this prcess, the IAASB s way f drafting standards was refrmed, and standards cntinue t be revised r develped using these clarity frmats and drafting prtcls. After 2009, the IAASB shifted its fcus t enhancing the rle, relevance and quality f assurance and related services in an evlving wrld, and revised a number f its assurance, review and ther services standards. At the same time, key stakehlders were calling fr the IAASB t fcus n supprting glbal financial stability. As the auditr s reprt is a key deliverable addressing the utput f the audit prcess fr users f the financial statements, and in the IAASB s tp pririty was a prject t revise the auditr s reprt. In rder t understand the effectiveness f the changes made in the clarity prject, i.e., whether further changes were needed, the IAASB undertk a pst-implementatin review f the clarified ISAs that was cmpleted in The Findings frm the Pst-Implementatin Review have largely infrmed the prjects undertaken since 2015, including influencing their relative priritizatin. The envirnment has als changed significantly in the last ten years, which has necessitated the IAASB t respnd: Stakehlder needs are cntinually evlving, including: Cmmented [BB3]: Pp-up bx - Fr example, reasnable r limited assurance engagements n a greenhuse gas statement, assurance engagements t reprt n cntrls at a service rganizatin, and assurance engagements t reprt n the cmpilatin f pr frma financial infrmatin included in a prspectus. The applicable IAASB standards are the Internatinal Standards n Assurance Engagements (ISAEs). Cmmented [BB4]: Pp-up bx - Fr example, cmpilatin engagements, engagements t apply agreed-upn prcedures t infrmatin, and ther related services engagements as specified by the IAASB. The applicable IAASB standards are the Internatinal Standards n Related Services (ISRSs). Cmmented [BB5]: Pp-up bx - The applicable IAASB standards are the Internatinal Standards n Quality Cntrl (ISQCs). Cmmented [BB6]: Pp-up bx - This material includes Practice Ntes such as the IAASB s Internatinal Auditing Practice Ntes (IAPNs), and Staff publicatins. Cmmented [BB7]: Pp-Up bx: Revisins: ISRE 2400 (Revised), Engagements t Review Histrical Financial Statements; ISRS 4410 (Revised), Cmpilatin Engagements; ISAE 3000 (Revised), Assurance Engagements Other Than Audits r Reviews f Histrical Financial Infrmatin New: ISAE 3410, Assurance Engagements n Greenhuse Gas Statements; ISAE 3420, Assurance Engagements t Reprt n the Cmpilatin f Pr Frma Financial Infrmatin Included in a Prspectus Cmmented [BB8]: Pp-up bx Sectin II describes the IAASB s specific prjects and initiatives undertaken since 2015 and that are currently underway. An increasing call fr transparency abut the audit (with a significant prject t revise the auditr s reprt, 2 as described abve, cmpleted in late 2014). An increasing fcus n nn-financial and frward-lking infrmatin, and ther types f envirnmental reprting, with the IAASB establishing its Innvatin, Needs, and Future Opprtunities (INFO) Wrking Grup (nw called the Innvatin Wrking Grup) in 2014 t mnitr evlving develpments ptentially affecting the IAASB s standards. The regulatry cmmunity has becme rganized, in particular rganizatins f internatinal audit versight bdies have becme structured and are seeking t enhance cnsistency f the reviews f audits that are perfrmed jurisdictinally, with glbal findings being made public n an annual basis. 2 The new and revised Auditr Reprting Standards cmprise ISA 700 (Revised), Frming an Opinin and Reprting n Financial Statements; New ISA 701, Cmmunicating Key Audit Matters in the Independent Auditr s Reprt; ISA 705 (Revised), Mdificatins t the Opinin in the Independent Auditr s Reprt; ISA 706 (Revised), Emphasis f Matter Paragraphs and Other Matter Paragraphs in the Independent Auditr s Reprt; ISA 570 (Revised), Ging Cncern; ISA 260 (Revised), Cmmunicatin with Thse Charged with Gvernance; and cnfrming amendments t ther ISAs. Cmmented [BB9]: Pp-up bx: This wrking grup was established with the mandate t identify the need fr develpment, r revisin, f an Internatinal Standard r ther guidance fr auditrs and practitiners. Cmmented [BB10]: Pp-up bx: In undertaking its activities, the Innvatin Wrking Grup identified tw emerging areas that the IAASB agreed necessitated separate wrkstreams, and fr which separate Wrking Grups / Task Frces have been established: (1) the Emerging Frms f External Reprting (EER) Task Frce (frmerly the Integrated Reprting Wrking Grup) and (2) the Data Analytics Wrking Grup. The related activities and prjects f these grups are further described in Sectin II. Page 2 f 14

3 There are different, cmpeting, and ever increasing calls frm imprtant stakehlder grups fr mre t be dne t address their specific challenges, sme f which als vary frm stakehlder t anther. In additin t calls frm regulatrs fr mre rbust requirements, thse prviding services t smalland medium-entities (SME s) are calling fr simpler standards with mre help needed t supprt the effective implementatin f the standards. Financial reprting framewrks have als changed t address changes in the envirnment, with increasing emphasis being placed n rbust disclsures. Fr example, Internatinal Financial Reprting Standard (IFRS) 9, Financial Instruments, resulted in a call, in particular frm banking regulatrs, fr changes in the auditing standards t address issues arising frm the impending adptin f IFRS 9, especially fr financial institutins. This resulted in an accelerated prject t revise ISA relating t the audit f accunting estimates and fair values. Technlgy is evlving at an increasingly rapid pace and affecting the way that entities and audit firms perate, and hw audits and ther engagements are being undertaken. Audits f public sectr authrities r entities are increasingly being undertaken using the ISAs. There have been increasing calls fr mre help with the implementatin f the standards fr this sectr. The IAASB s crdinatin effrts with the Internatinal Ethics Standards Bard fr Accuntants (IESBA) and the Internatinal Accunting Educatin Standards Bard (IAESB) have als becme increasingly imprtant as changes made in the IESBA and IAESB standards smetimes directly impact the IAASB s standards, as well as increasing stakehlder expectatin that the standards are nt incnsistent with each ther. Cmmented [BB11]: Pp-up bx: Public sectr auditing standards, the Internatinal Standards f Supreme Audit Institutins (ISSAI s), incrprate the extant ISAs, with a Practice Nte develped by the Internatinal Organizatin f Supreme Audit Institutins (INTOSAI) fr each ISSAI t prvide guidance n the applicatin f the ISAs in a public sectr envirnment In summary, t respnd t the changing envirnment and in fulfilling its verall bjective, the IAASB s areas f brad strategic fcus ver the past 10 years have been: (a) (b) (c) The develpment r revisin f standards; Mnitring the adptin f thse standards; and Respnding t cncerns abut the implementatin f the standards by activities designed t imprve the cnsistency and effectiveness f their applicatin. In the cntext f the abve areas f brad strategic fcus, and the changing envirnment, the IAASB is cnsulting its stakehlders fr input n matters relating t the IAASB s future strategy and prject pririties. Fr example, it may be the apprpriate time t cnsider whether anther refrm f the IAASB s standards and activities, including the way that the activities are undertaken, is needed. This input assists the IAASB in identifying strategic themes t be addressed, and in identifying and priritizing specific prjects and initiatives, such that the IAASB s activities are in the public interest. What the IAASB is Asking in this Survey We are requesting input frm all interested stakehlders and request that survey respndents cmplete and submit Sectins I and III by July X, Sectin I Infrmatin abut the capacity in which respndents are cmpleting the survey. Cmmented [BB12]: In this sectin we will have mre detailed instructins depending n the structure f the survey tl we use - fr example click here t access the survey, cmplete the questins and hit submit t send yur respnses etc. Cmmented [BB13]: Link t sectin I 3 ISA 540, Auditing Accunting Estimates, Including Fair Value Accunting Estimates, and Related Disclsures Page 3 f 14

4 Sectin II Describes the current Strategy and IAASB prjects and initiatives, including the expected timing fr cmpletin fr the prjects currently underway. This will assist respndents understand which prjects cntinue int 2020, (thereby prviding cntext abut hw the IAASB will begin its strategy perid). Sectin III Specific questins fr respndents. Cmmented [BB14]: Link t sectin II Cmmented [BB15]: Link t sectin III Individual respnses t the questinnaire will be n public recrd. Page 4 f 14

5 SECTION I: ABOUT THE RESPONDENT IAASB Future Strategy Survey 1. Frm which perspective are yu prviding this feedback: (a) A persnal view. (b) The view f an rganizatin. [If (a) is selected] Name Organizatin (if applicable): [If (b) is selected the fllwing ptins (the full bullet pints ) will appear. Fr thse where there are hllw bullet pints, these will nly appear as ptins if the categry t which they are attached is selected] Name Organizatin: Select frm the fllwing ptins that describe yur rganizatin: Academia Accunting Firm Glbal accunting firm Large natinal r reginal accunting firm Small- r medium-sized accunting firm Sle practitiner IFAC Member Bdy r Other Prfessinal Organizatin IFAC Member Bdy, Affiliate r Reginal Organizatin Other prfessinal rganizatin Investr r Analyst Natinal Standard Setter Natinal auditing standards same as, r based n, the IAASB s current Internatinal Standards n Auditing [Yes/N] Other natinal standards same as, r based n, IAASB s ther standards (i.e., assurance, related services and reviews) [Yes/N] [if n] Please specify which standards are used. Preparer f Financial Statements Listed entity Nn-listed entity Small- r medium-sized entity [Yes/N] Public Sectr D yu apply Internatinal Standards f Supreme Audit Institutins (ISSAIs) fr financial audits [Yes/N] Page 5 f 14

6 Regulatr r Audit Oversight Bdy Thse Charged with Gvernance Private sectr Listed entity Nn-listed entity Public sectr Other Please specify 2. Are yu any f the fllwing? [this ptin will nly appear if the respndent is an individual] IAASB Cnsultative Advisry Grup Representative IAASB Observer IAASB Member Frmer IAASB Member Frmer Cnsultative Advisry Grup Representative Member, Technical Advisr r Observer f Other Public Interest Activity Cmmittee, IFAC Bard r Other IFAC Cmmittee 3. Gegraphical Regin Please select the gegraphical regin where yu are based: Africa-Middle East Asia Pacific Eurpe Suth America Nrth America Glbal Organizatin [this will nt cme up as an ptin if the respndent s view is a persnal view] Please indicate whether yu wish t be ntified by when the Cnsultatin Paper n the IAASB s draft Future Strategy ( ) and Wrk Plans is issued fr public cmment, tgether with a link where the paper can be dwnladed. Yes address: N Page 6 f 14

7 SECTION II CONTEXT FOR THE IAASB s STRATEGY The IAASB s Strategy fr The IAASB s current strategy runs frm , and was develped in the cntext f varius influences n the Bard s activities as described in the Backgrund sectin. The strategy sets ut the Bard s mediumterm visin fr its activities during this perid by describing three identified strategic bjectives. These three strategic bjectives (set ut belw) prvide further cntext fr the IAASB s mandate and utputs, and illustrate hw the IAASB has, and cntinues t, fcus its activities. A mid-perid review f the cntinuing relevance f the three strategic bjectives was undertaken in 2016, and ur stakehlders cnfirmed that the three strategic bjectives remained relevant fr the rest f the strategy perid. The strategic bjectives fr identified were t: (i) (ii) (iii) Ensure that ISAs Cntinue t Frm the Basis fr High-Quality, Valuable and Relevant Audits Cnducted Wrldwide by Respnding n a Timely Basis t Issues Nted in Practice and Emerging Develpments Ensure the IAASB s Standards Evlve as Necessary t Adequately Address the Emerging Needs f Stakehlders fr Services Other than Audits f Financial Statements Strengthen Outreach and Cllabratin with Key Stakehlders in the Reprting Supply Chain n Public Interest Issues Relevant t Audit, Assurance and Related Services In this cntext, in the perid , the IAASB has wrked (and cntinues t wrk) twards: Enhancing the quality and rbustness f the audit t supprt financial stability, recgnizing that the wrk f the auditr plays a key rle in the credibility f audited financial statements fr stakehlders. Develping internatinal standards and ther guidance t address services ther than audits f financial statements. The IAASB heeded calls frm users, practitiners and thers fr new and evlving services that were seen t be mst relevant in the current envirnment. In supprt f its effrts, the IAASB has increased its fcus n brad-based utreach, and n enhancing relatinships with internatinal and natinal regulatry bdies, auditr versight and inspectin authrities, investrs, natinal standard setters, rganizatins representing small- and medium-practices (SMPs) and practitiners. Thrugh this utreach the IAASB has cntinued its emphasis n encuraging and facilitating adptin and effective implementatin f the ISAs and ther IAASB standards. Cmmented [BB16]: Pp up bx: Since the start f 2015, IAASB members, and thers related t the IAASB s wrk, have undertaken 430 utreach events and presentatins abut the IAASB s wrk. The specific prjects currently underway are described belw, including the expected timing fr cmpletin f these prjects. The IAASB s Activities in the Perid The IAASB s tw-year wrk plans set ut the specific initiatives and prjects, as well as their relative pririties, in cntext f the brader strategy. Public cnsultatins n the Wrk Plan fr and the Wrk Plan fr were undertaken t help the IAASB understand stakehlders expectatins abut the specific prjects and pririties f the IAASB. The IAASB apprved wrk plans fr and have been develped in light f input received. Page 7 f 14

8 The prjects currently underway in 2018 will mstly cntinue int 2019 (and sme beynd). Accrdingly, and as described in mre detail belw, wrk in 2019 will fcus n cmpleting thse prjects already underway. What Did the IAASB D in ? In , the IAASB cmpleted its prjects t revise ISA 720, 4 t make revisins t the ISAs addressing the auditing f financial statement disclsures, and t amend the ISA 800 series. 5 The IAASB als undertk effrts t prmte awareness and understanding and supprt effective implementatin f the new and revised Auditr Reprting standards. The IAASB cmmenced wrk n a number f significant new prjects, largely driven by the findings frm the IAASB s ISA Implementatin Mnitring Prject and nging utreach and engagement with stakehlders, including regulatrs. In light f the findings frm the IAASB s pst-implementatin review f the clarified ISAs, and frm glbal utreach t further understand the challenges and issues with implementing the ISAs, the IAASB undertk a glbal cnsultatin n a number f interrelated tpics, t btain further insight t the challenges and issues that had been identified. The IAASB s Invitatin t Cmment, Enhancing Audit Quality in the Public Interest A Fcus n Prfessinal Skepticism, Quality Cntrl and Grup Audits, sets ut issues related t quality cntrl (at the firm and engagement level), prfessinal skepticism and grup audits, as well as pssible actins t address the issues. The input frm this cnsultatin has helped infrm the standard-setting activities f the prjects t revise ISQC 1, 6 ISA 220, 7 and ISA In additin, significant new changes t the Internatinal Financial Reprting Standards, 9 and cnsequential calls frm audit, banking and insurance regulatrs, prpelled a prject t cnsider changes t ISA 540 related t auditing fair values and accunting estimates. Therefre, the significant new prjects that cmmenced during the perid included: Revisins t ISA 540 t drive mre rbust prcedures in relatin t accunting estimates and related disclsures. Revisins t ISQC 1 10 t strengthen and imprve a firm s management f quality fr all engagements perfrmed under the IAASB s Internatinal Standards by mre explicitly incrprating a quality management apprach. Revisins t ISA 220 t strengthen aspects f quality management fr individual audit engagements. 4 ISA 720 (Revised), The Auditr s Respnsibilities Relating t Other Infrmatin in Dcuments Cntaining Audited Financial Statements 5 The ISA 800 series includes ISA 800, Special Cnsideratins Audits f Financial Statements Prepared in Accrdance with Special Purpse Framewrks, ISA 805, Special Cnsideratins Audits f Single Financial Statements and Specific Elements, Accunts r Items f a Financial Statement and ISA 810, Engagements t Reprt n Summary Financial Statement 6 Internatinal Standard n Quality Cntrl (ISQC) 1, Quality Cntrl fr Firms that Perfrm Audits and Reviews f Financial Statements and Other Assurance and Related Services Engagements 7 ISA 220, Quality Cntrl fr an Audit f Financial Statements 8 ISA 600, Special Cnsideratins Audits f Grup Financial Statements (Including the Wrk f Cmpnent Auditrs) 9 In particular Internatinal Financial Reprting Standard (IFRS) 9, Fair Value 10 In prgressing changes t ISQC 1, the IAASB agreed t bifurcate the requirements and guidance relating t Engagement Quality Cntrl Reviews (new standard ISQC 2). Page 8 f 14

9 Revisins t ISA 600 t strengthen the auditr s apprach t planning and perfrmance f a grup audit and clarify the interactin f ISA 600 with ther ISAs. Revisins t ISA 315 (Revised) 11 t establish mre rbust requirements and apprpriately detailed guidance t drive auditrs t perfrm apprpriate risk assessment prcedures in a manner cmmensurate with the size and nature f the entity. Explring recmmendatins n hw t mre effectively respnd t issues related t prfessinal skepticism thrughut the IAASB s standards. In additin, the IAASB frmed wrking grups t explre: Emerging develpments in the need fr assurance fr integrated reprting and ther emerging external reprting. Emerging develpments in the effective and apprpriate use f technlgy, including data analytics, and hw changes relating t data analytics culd be made in the ISAs currently being revised. Current use and practice relating t agreed-upn prcedures engagements, including whether there was a need t revise ISRS The IAASB als cmmenced mre frmalized crdinatin effrts with the IESBA in light f changes it was making related t nn-cmpliance with laws and regulatins, and the direct impact n the ISAs, in particular ISA Cmmented [BB17]: Pp-up bx: As described previusly, the frmatin f the Integrated Reprting Wrking Grup had been prmpted by the wrk f the Innvatin Wrking Grup Cmmented [BB18]: Pp-up bx: As described previusly, the frmatin f the Data Analytics Wrking Grup had been prmpted by the wrk f the Innvatin Wrking Grup Cmmented [BB19]: Pp-up bx: A prject t revise ISRS 4400 was planned fr the Wrk Plan, but was pstpned due t the reallcatin f resurces t fcus n the Auditr Reprting prject The IAASB s fcus n the pririty prjects that cmmenced in extended t the Wrk Plan fr Other wrk n initiatives that had started in the perid als cntinued, with a prject t revise ISRS 4400 cmmencing. During this perid stakehlders have cntinually emphasized the imprtance f the IAASB cmpleting its wrk n the key ISAs where wrk was underway, and the IAASB fcused its resurces and effrts n the prjects that had cmmenced at the start f the In additin t prgressing the prjects started in , ther areas, existing and emerging, als necessitated the IAASB s attentin, and wrk als started n: The develpment f nn-authritative guidance t enable mre cnsistent and apprpriate applicatin f ISAE 3000 (Revised) 14 t emerging frms f external reprting (EER). Initial activities t explre what mre can be dne fr SMPs and in relatin t audits f SMEs (r nncmplex entities). As the IAASB has prgressed changes t the key ISAs being revised, scalability has been a strategic fcus in each f the prjects, but the IAASB is cnsidering what, if anything, further can be dne. Cmmented [BB20]: Pp-up bx: The explratry wrk by the Integrated Reprting Wrking Grup indicated that the assurance needs were brader than nly integrated reprting, but rather spanned a range f emerging types f external reprting. Accrdingly, the Integrated Reprting Wrking Grup was renamed the EER Wrking Grup t dente its brader remit. 11 ISA 315 (Revised), Identifying and Assessing the Risks f Material Misstatement thrugh Understanding the Entity and Its Envirnment 12 Internatinal Standard n Related Services (ISRS) 4400, Engagements t Perfrm Agreed-Upn Prcedures Regarding Financial Infrmatin 13 ISA 250, Cnsideratin f Laws and Regulatins in an Audit f Financial Statements 14 Internatinal Standards n Assurance Engagements (ISAE) 3000, Assurance Engagements Other Than Audits r Reviews f Histrical Financial Infrmatin Page 9 f 14

10 The IAASB has als increased and frmalized its crdinatin effrts with the IESBA, thrugh establishing a crdinatin framewrk setting ut perating principles, criteria and ther key cnsideratins fr crdinatin, annual jint meetings f the Bards, as well as wrking clsely n matters f mutual interest. The IAASB s Frward Agenda sets ut the IAASB s mst current expectatins fr the prgressin and cmpletin f the prjects currently underway in As prjects cmplete in 2018 and 2019, and capacity pens up, time and effrts will first be fcused n prjects cmmenced but nt significantly prgressed (such as the prject t revise ISA 600), and then n further explratins relating t a pssible prject n Audit Evidence (this includes cnsideratin f the revisin f certain relevant ISAs, but als includes aspects f matters relating t prfessinal skepticism and data analytics).twards the end f 2018, the Bard will likely cmmence activities relating t the pst-implementatin review f the Auditr Reprting standards, as well as nging explratin f matters related t audits f SME s. Cmmented [BB21]: Will link t planned frward agenda (see Agenda Item 1-B) What Abut 2019? As can be seen by the IAASB s Frward Agenda, there is n capacity fr new unplanned prjects r initiatives in The Bard has nted the input frm its stakehlders t cntinue t fcus n cmpleting utstanding prjects befre turning its attentin t new nes. Therefre, the Bard s effrts will be fcused n cmpleting the significant prjects cmmenced and prgressed in Accrdingly, the Bard will nt be cnsulting n this ne year wrk plan. Mre detailed descriptins abut the IAASB s prjects and initiatives, including prgress t date, can be fund n the IAASB s prject pages n the website. What May Impact the IAASB s Activities in In the current Strategy perid, it has becme clear that there are sme verarching challenges arising frm the IAASB s wrk, which will likely cntinue int the next strategy perid, including: The priritizatin f different and cmpeting calls fr IAASB actin this includes the prjects that are selected, as well as hw the IAASB addresses the issues that have been raised, s that the IAASB is seen t be cntinuing t act in the public interest in the activities it undertakes. Deciding hw t heed the call fr mre effrts t supprt effective implementatin f the IAASB s standards the IAASB has nt traditinally develped detailed implementatin guidance but there are nging and increasing calls fr such guidance frm many different stakehlders. Cntinuing t crdinate n a timely basis with IESBA n matters f mutual interest including addressing the impact n the internatinal auditing and assurance standards f recent, and nging, changes being made t IESBA s Internatinal Cde f Ethics fr Prfessinal Accuntants (including Internatinal Independence Standards) (Cde f Ethics). Keeping the standards fit-fr-purpse with the current pace f change in relatin t technlgy and its cnsequential effect n the envirnment this includes hw technlgy is causing audit firms t challenge traditinal appraches t auditing and t transfrm the manner in which audits are being perfrmed, fr example: Mre advanced data analytics are being used t perfrm audit prcedures, especially as IT systems cntinue t evlve at a rapid pace. Data analytics tls and techniques are being used t perfrm different, and in sme cases mre rbust prcedures, than traditinal audit methds, Page 10 f 14

11 thereby changing the way that audit evidence is btained. This may in turn impact hw certain extant standards are structured. Engagement teams are being structured differently and there is increased use f audit delivery centers t fcus n specific aspects r functins, and increasingly technlgy is leveraged t prvide fr mre virtual cllabratin between engagement teams, thereby intrducing new quality management challenges at bth the firm and engagement level. In additin t cmpleting the prjects still underway at the start f 2020, and the challenges described abve, ther strategic factrs and trends likely t influence the wrk f the IAASB in include: Whether the quality f audits will imprve nce the key ISAs recently revised, r currently being revised, are implemented including whether the revisins will achieve their desired bjectives. Whether the standards currently being revised r develped are scalable that includes whether the revised and new standards have been effectively implemented by firms f differing nature and size. Cntinuing evlving stakehlder needs the need fr brader assurance may impact the fcus f the IAASB s activities n its suite f standards: There appears t be a cntinuing shift f fcus away frm audits f histrical financial infrmatin twards reprting n nn-financial (e.g., envirnmental) r frward-lking infrmatin, and ther emerging frms f external reprting. The audit market may cntinue t change frm 2020 nwards. Changing audit threshlds in certain jurisdictins may impact the types f services being perfrmed (fr example, increasing numbers f entities may n lnger be required t have an audit perfrmed, and these entities may lk fr ther types f engagements delivering assurance r related services). The nging evlutin f the expectatins and needs f regulatrs in relatin t regulated entities including the impact n the standards, fr example: public interest entities may require different kinds f standards and guidance versus what is needed by nn-public interest entities fr effective implementatin; financial institutins may require mre specific guidance abut hw the standards shuld be effectively implemented. At the same time, there may be pprtunities that the IAASB shuld (r culd) be leveraging in what it des r the way it des it, in particular in light f changing technlgy, fr example: An interactive handbk may help supprt the scalability f the standards. Technlgy may be used t facilitate internatinal meetings. Cnsideratin culd be given t a mre a mre strategic review f the extant standards s that they are fit-fr-purpse in the evlving envirnment. In additin, further cnsideratin may be needed abut hw the Bard perates in rder t address cncerns abut the capacity f the Bard t set standards and undertake its activities, including hw the Bard and the Staff are resurced. Page 11 f 14

12 SECTION III QUESTIONS FOR RESPONDENTS ABOUT THE IAASB S STRATEGY FOR The IAASB is cmmitted t the gal f develping a set f internatinal standards which are generally accepted wrldwide. There are nw 126 jurisdictins using r cmmitted t using IAASB s Clarified ISAs. The IAASB s current mandate is t set high-quality internatinal standards t serve the public interest. The Wrk Plan is reflective f the need t fcus n supprting the perfrmance f high-quality audits, with a result that the IAASB is currently revising several significant ISAs and its Quality Cntrl standards (as explained in Sectin II). These prjects are expected t start reaching cmpletin in 2018, but sme f the mre significant prjects are expected t cntinue well int 2020 r beynd. Sectin II als sets ut additinal pprtunities and challenges fr the IAASB as it cnsiders its activities fr As the current prjects are cmpleted, it is imprtant fr the IAASB t fcus n where and hw its resurces shuld be deplyed t meet its public interest mandate. In ding s, the IAASB is f the view that gathering infrmatin t understand the future directin t be embdied in its Strategy shuld be embarked n with an pen mind, while still taking int accunt the needs f the IAASB s stakehlders within its mandate. 15 Accrdingly, the IAASB is seeking views t help identify key issues fr cnsideratin in develping its future strategy. Input that is insightful r influential in shaping the directin f its future strategy is particularly welcme. GLOBAL ISSUES, TRENDS OR DEVELOPMENTS 1. What, in yur view, will the strategic envirnment which impacts the IAASB s activities lk like in 2020 nwards (fr example, will the audit market change significantly and what impact may this have n the IAASB s standards; will ther services dminate stakehlders needs including what the needs may be fr different types f services; hw will technlgy impact the IAASB s envirnment in which it perates, etc.). 2. In yur view, as the IAASB develps its Strategy fr , what are the key: (a) Challenges and ther factrs that may impact the IAASB s activities and fcus; and (b) Opprtunities fr changing the way it undertakes its activities. 3. Are there specific initiatives within the stakehlder grup t which yu belng, r f which yu are aware, that yu believe the IAASB shuld actively mnitr in light f their ptential t infrm the IAASB s future agenda, and why? FOCUSING THE IAASB s ACTIVITIES IN Fr the perid , the IAASB has fcused a significant part f its effrts n develping and revising standards addressing the audit f histrical financial infrmatin and quality cntrl. As prjects are cmpleted, shuld the IAASB, in yur view, first cnsider prjects n new tpics (as determined by the cnsultatin n the IAASB s future strategy and pririties), r shuld cnsideratin rather be given t a strategic review f extant standards (fr example, cnsider hw the standards 15 As previusly nted, the IAASB fllws with great interest the cnsultatin currently underway by the Mnitring Grup (MG) n the IAASB s structure, gvernance and versight, with changes that will likely impact the strategy perid. The IAASB still believes it is imprtant t cntinue with the strategy develpment prcess in light f the imprtance f the smth cntinuatin f the IAASB s activities until and during any changes resulting frm the MG cnsultatin. Page 12 f 14

13 culd be better structured r presented in light f evlving technlgies, including describing what this culd be)? 5. The IAASB recgnizes the need t strike a balance between develping new and revising extant standards t further enhance practice, and taking steps t supprt further glbal implementatin f existing standards, including by SMPs. Accrdingly, the IAASB is als seeking views n the apprpriate balance between setting new and revising standards, and facilitating their adptin and effective implementatin, as well as areas f fcus acrss the range f its standards. (a) Fr new prjects, shuld the IAASB best serve the public interest in the increasingly disruptive envirnment thrugh slely develping high-quality internatinal standards, r wuld ther supprting activities t facilitate adptin, and mnitring and facilitating effective implementatin f standards (e.g., guidance related t implementatin r frmalized pstimplementatin reviews) be mre beneficial? Hw, in yur view, shuld the IAASB fcus the majrity f its effrts: (i) (ii) (iii) Develping new r revised standards; r Facilitating adptin, and mnitring and facilitating effective implementatin, f its standards (e.g., thrugh material that assists adptin f the standards r develpment f guidance such as Practice Ntes r staff publicatins); r Apply effrts t bth, and if s, in what prprtin (please prvide relative %; t ttal 100%)? Cmmented [BB22]: Fr each categry belw we will add a cmment bx fr further input n what implementatin / mnitring activities are needed. Audits and reviews f histrical financial infrmatin Other assurance EER and related standards Other assurance (ther than EER and related standards) and related services - (indicate (i) develp new r revised standards ; ii) facilitate adptin, and mnitr and facilitate effective implementatin, f standards; r iii) apply effrts t bth) - (indicate (i) develp new r revised standards; ii) facilitate adptin, and mnitr and facilitate effective implementatin, f standards; r iii) apply effrts t bth) - (indicate (i) develp new r revised standards; ii) facilitate adptin, and mnitr and facilitate effective implementatin, f standards; r iii) apply effrts t bth) Quality cntrl - (indicate (i) develp new r revised standards; ii) facilitate adptin, and mnitr and facilitate effective implementatin, f standards; r iii) apply effrts t bth) Please indicate the ratinale fr yur respnses and any related cmments yu may have. (b) With respect t new standard-setting prjects fr the perid , in serving the public interest and achieving its bjectives, in yur view what prprtin f effrt shuld the IAASB allcate t develping new r revising existing standards fr each f the fllwing? (Allcatin shuld ttal 100%) Cmmented [BB23]: Pp-up bx: At present there are tw ISREs: (i) ISRE 2400 (Revised), Engagements t Review Histrical Financial Statements, which was revised in September 2012; and (ii) ISRE 2410, Review f Interim Financial Infrmatin Perfrmed by the Independent Auditr f the Entity Cmmented [BB24]: Fr each f these ptins in this questin an ptin t select % s will appear Cmmented [BB25]: Pp-up bx: Includes IAASB effrts related t EER; the recently revised ISAE 3000 (Revised), Assurance Engagements Other than Audits r Reviews f Histrical Financial Infrmatin, as well as subject-specific assurance standard n assurance n greenhuse gas statements (ISAE 3410, Assurance Engagements n Greenhuse Gas Statements) Cmmented [BB26]: Pp-up bx: Standards relating t ther assurance (ther than EER and related standards) include: ISAE 3400, The Examinatin f Prspective Financial Infrmatin; ISAE 3402, Assurance Reprts n Cntrls at a Service Organizatin, ISAE 3420, Assurance Engagements t Reprt n Cmpilatin f Pr Frma Financial Infrmatin Included in a Prspectus. Cmmented [BB27]: Pp-up bx: Related services prnuncements include: ISRS 4400, Engagements t Perfrm Agreed-0Upn Prcedures Regarding Financial Infrmatin (currently being revised); ISRS 4410 (Revised), Cmpilatin Engagements Page 13 f 14

14 Audits and reviews f histrical financial infrmatin Other assurance EER and related standards Other assurance (ther than EER and related standards) and related services ( indicate %) ( indicate %) ( indicate %) Cmmented [BB28]: The same pp-up bxes as in (a) abve will appear here describing what is included in each categry Quality cntrl ( indicate %) Please indicate the ratinale fr yur respnse and any related cmments yu may have. 6. In yur view, shuld a mratrium n new r revised standards be cnsidered after finalizatin and during implementatin f the current standards under revisin (i.e., thse standards that currently have a cmmitted prject plan in place)? Please prvide an explanatin fr yur view. Cmmented [BB29]: Will be a cmment bx next t each t allw fr additinal cmments SPECIFIC AREAS OF POTENTIAL FOCUS 7. If there was a specific tpic(s) that, in yur view, shuld be the IAASB s pririty(ies) when develping new, r revising existing, standards r related guidance fr the perid , what wuld it be, and why? Where applicable, kindly indicate whether in yur view the tpic(s) (yu have indicated) has particular relevance mainly fr engagements fr listed entities, small- and medium-sized entities (SMEs), r fr entities f all sizes. Views in relatin t matters f relevance t develping natins and the public sectr are als encuraged. OTHER 8. Are there any ther tpics f interest r matters f relevance that yu feel the IAASB shuld cnsider when cnducting its strategic review, including thse related t its mdus perandi? [Submit Respnse] Thank yu fr cmpleting ur survey yur respnse is very imprtant t us. Page 14 f 14