Comments to be received by 30 August 2016

Transcription

1 28 July 2016 T: Members f the Hng Kng Institute f CPAs All ther interested parties INVITATION TO COMMENT ON INTERNATIONAL AUDITING AND ASSURANCE STANDARDS BOARD'S (IAASB) SURVEY CONSULTATION, THE IAASB'S WORK PLAN FOR AND CONTINUING RELEVANCE OF ITS STRATEGIC OBJECTIVES Cmments t be received by 30 August 2016 The Hng Kng Institute f Certified Public Accuntants' ("Institute") Auditing and Assurance Standards Cmmittee is seeking cmments n IAASB's Survey Cnsultatin, The IAASB's Wrk Plan fr and Cntinuing Relevance f Its Strategic Objectives ("Survey Cnsultatin") which has been psted n the Institute's website at: expsure-drafts/ The Survey Cnsultatin seeks feedback frm stakehlders t assist the IAASB in evaluating its pririties fr and allcating its resurces in the best way pssible. The IAASB and its Cnsultative Advisry Grup have cnsidered a number f ther tpics that culd warrant IAASB attentin, which are highlighted in the survey. Respndents are asked fr their views n hw tpics shuld be priritized, recgnizing that much f the IAASB's current standard-setting effrts will carry n int 2017 and beynd unless the IAASB decides t mdify its current wrk plan. A PDF versin f the survey has been prvided t assist rganisatins that may need t cnsult internally in preparing their respnse. T allw yur cmments n the Survey Cnsultatin t be cnsidered, cmments are requested by the due date shwn abve. Cmments may be sent by mail, fax r t: Standard Setting Department Hng Kng Institute f Certified Public Accuntants 37/F., Wu Chung Huse 213 Queen's Rad East Hng Kng Fax number (+852) cmmentletters@hkicpa.rg.hk Cmments will be acknwledged and may be made available fr public review unless therwise requested by the cntributr

2 28 July 2016 Survey Cnsultatin Survey Cnsultatin Respnse Due Date 30 August 2016 IAASB's Wrk Plan fr and Cntinuing Relevance f Its Strategic Objectives

3 CONTENTS Survey Cnsultatin n IAASB's Wrk Plan fr and Cntinuing Relevance f Its Strategic Objectives This Expsure Draft may be filed in the "Expsure Drafts, Invitatins t Cmment" sectin f Vlume III f the Institute Members' Handbk. The Expsure Draft can als be fund n the Institute's website at: e-drafts/. 2

4 SURVEY CONSULTATION THE IAASB S WORK PLAN FOR AND CONTINUING RELEVANCE OF ITS STRATEGIC OBJECTIVES Nte: This PDF versin f the survey is being prvided t assist rganizatins that may need t cnsult internally in preparing their respnse. Survey respnses will nly be accepted via Survey Gizm by fllwing this link: IAASB Survey n Wrk Plan fr and Cntinuing Relevance f Its Strategic Objectives. Objective f the Cnsultatin The IAASB undertk extensive public cnsultatin t develp its Strategy fr (the Strategy) and Wrk Plan fr (the current Wrk Plan), including an initial survey t help understand the needs f stakehlders at that time. In embarking n its plans fr the five-year strategy perid, the IAASB identified three strategic bjectives fr this perid, based n input frm its stakehlders, as a means fr them t understand mre bradly hw their needs are being addressed in a changing envirnment. 1 Respndents t the public cnsultatin agreed with the IAASB s fcus, including that the right tpics fr the Wrk Plan had been identified, recgnizing that many were quite cmplex and revised standards were nt likely t be cmpleted within the tw-year perid. The IAASB s extensive utreach in 2015 and 2016 indicates brad supprt fr the Bard s current fcus and actins. Sme stakehlders have urged the IAASB t prgress these standard-setting tpics as quickly as pssible. Accrdingly, the IAASB and its Cnsultative Advisry Grup (CAG) generally believe that, absent a significant change in the external envirnment r a strng stakehlder view therwise, the Bard s initiatives shuld cntinue, albeit they may need t be re-priritized. Having frmed its views, the IAASB wuld like t hear frm its stakehlders whether they agree. The bjective f this cnsultatin is therefre t: Slicit feedback whether the IAASB s strategic bjectives cntinue t be apprpriate (Sectin I f this cnsultatin). Obtain stakehlder views n the IAASB s prpsed Wrk Plan fr (Sectin II f this cnsultatin). Feedback t this cnsultatin will assist the Bard in evaluating its pririties and allcating its resurces in the best way pssible, given the vlunteer nature f the Bard and staff cmplement. Based n available current capacity and resurces, it is unlikely that any significant new prjects r initiatives can cmmence until at least 2018 withut mdifying the IAASB s current wrk plan and planned timelines. 1 In mving t a five-year strategy, the IAASB agreed with the Public Interest Oversight Bard that it wuld undertake a mid-perid reevaluatin f its strategic bjectives.

5 The accmpanying Supplement t the IAASB Strategy and Wrk Plan Cnsultatin prvides backgrund infrmatin fr thse respndents wh may nt be familiar with the IAASB s structure and prcesses and hw it develps its wrk plans. Respndent Infrmatin Are yu respnding: On behalf f an rganizatin? If s, please name the rganizatin. As an individual prviding yur persnal views? Please select frm the fllwing which best describes the capacity in which yu are respnding t this questinnaire: Academia Accunting Firm Large accunting firm Small r medium sized practice Sle practitiner IFAC Member Bdy r Other Prfessinal Organizatin IFAC Member Bdy, Affiliate r Reginal Organizatin Other prfessinal rganizatin Investr/Analyst/User Natinal Standard Setter Natinal standards same as, r based n, clarified Internatinal Standards n Auditing [Yes/N] Preparer f Financial Statements Listed entity Nn-listed entity Small- r medium-sized entity [Yes/N] Public Sectr Preparer Auditr Public sectr rganizatin D yu apply Internatinal Standards f Supreme Audit Institutins (ISSAIs) fr financial audits? [Yes/N] Regulatr r Audit Oversight Bdy Regulatr Audit Oversight Bdy 2

6 Thse Charged with Gvernance Private sectr Listed entity Nn-listed entity Public sectr Other Please specify Are yu any f the fllwing? IAASB Cnsultative Advisry Grup Member Organizatin / Representative IAASB Official Observer IAASB Member (current r frmer) Member, Technical Advisr r Official Observer f Internatinal Ethics Standards Bard fr Accuntants (IESBA), Internatinal Accunting Educatin Standards Bard (IAESB), r Internatinal Public Sectr Accunting Standards Bard Member, Technical Advisr r Official Observer f the IFAC Bard r Other IFAC Cmmittee Member f Frum f Firms Gegraphical Regin Please select the gegraphical regin which best describes where yu are based: Africa-Middle East Asia Pacific Eurpe Suth America Nrth America Glbal Organizatin 3

7 I. IAASB s Strategic Objectives fr As nted, in develping its Strategy, the IAASB articulated its strategic visin and what it is intending t achieve thrugh three strategic bjectives: (i) (ii) (iii) Ensuring 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 Ensuring the IAASB s Standards Evlve as Necessary t Adequately Address the Emerging Needs f Stakehlders fr Services Other than Audits f Financial Statements Strengthening Outreach and Cllabratin with Key Stakehlders in the Reprting Supply Chain n Public Interest Issues Relevant t Audit, Assurance and Related Services These strategic bjectives drive the IAASB s decisins abut what t include n its future wrk plans. As agreed when finalizing the Strategy, the IAASB is giving pririty attentin t the first strategic bjective, as stakehlders bradly agreed that it is essential that the IAASB take actin t imprve audit quality. Bth the IAASB and its CAG believe these strategic bjectives remain relevant and shuld be retained as the basis fr develping the Bard s next wrk plan. Questin fr Respndents: 1. D yu agree that the three strategic bjectives fr the strategy perid cntinue t remain relevant? Yes / N Why r why nt? II. IAASB Wrk Plan fr Cntext fr the IAASB s Wrk Plan fr During , the IAASB cmmenced wrk n a number f prjects as set ut in the current Wrk Plan. The Bard is investing significant effrt t respnd t sme f the key implementatin issues identified frm its pst-implementatin review f the clarified ISAs (the ISA Implementatin Mnitring prject) and address auditing issues f imprtance t supprting glbal financial stability, including in relatin t financial institutins. At the same time, while standard setting remains a pririty fr the IAASB, the Bard als recgnized the imprtance f preparing fr the future, bth in supprting the effective implementatin f its new and revised Auditr Reprting standards and undertaking utreach and ther activities t lay the fundatin fr imprtant initiatives t be undertaken in the future. A. Prjects and Initiatives Underway in As set ut in the current Wrk Plan, the IAASB has cmmenced wrk n the fllwing in 2015 and 2016, which are described in mre detail n the IAASB s prject page. The prjects belw set ut the IAASB s pririties currently underway, in particular the standard-setting activities that have, r are expected t have, cmmenced by the end f The IAASB intends t cntinue with these pririties during , unless stakehlders are f the view that ther tpics shuld have a higher pririty (which is explred further in the next sectin). 4

8 Standard-Setting Activities (prject prpsals t be apprved in 2016) Revisin f the IAASB s standard dealing with accunting estimates, including fair values, (ISA 540) (previusly characterized as the prject regarding special audit cnsideratins relevant t financial institutins) Current Status: The IAASB is develping an Expsure Draft (ED) f a hlistic revisin f its standard dealing with accunting estimates and anticipates apprving an ED in Dec A final standard is expected t be apprved in Dec In Mar 2016, the IAASB issued a prject publicatin highlighting the audit issues arising frm the Internatinal Accunting Standards Bard s (IASB) standard n financial instruments (IFRS 9), particularly the shift t expected credit lss accunting fr lan lsses. Quality cntrl (including revisins t the IAASB s quality cntrl standards at the firm level (ISQC 1) and the engagement level (ISA 220) Current Status: Included in the IAASB s Invitatin t Cmment (ITC). A standard-setting prject prpsal is expected t be apprved in Dec 2016, with plans fr EDs in mid Addressing tpics such as firms quality management apprach and tne at the tp, and mnitring and remediatin, engagement partner respnsibilities, and engagement quality cntrl reviews. Grup audits / using the wrk f ther auditrs (including revisin f the IAASB s standard addressing audits f grup financial statements) (ISA 600) Current Status: Included in the IAASB s ITC. A standard-setting prject prpsal is expected t be apprved in Dec 2016, with plans fr an ED in late Addressing tpics such as scping and risk assessment, cmmunicatins, respnsibilities regarding the wrk f cmpnent auditrs, and situatins where the engagement partner is nt lcated where the majrity f the audit wrk is perfrmed. Revisin f the IAASB s standard addressing the auditr s understanding f the entity and its envirnment and assessing risks (ISA 315 (Revised)) and cnsideratin f the need fr additinal guidance Current Status: The IAASB has had initial discussins t infrm its future standard setting and identify ther ptential actins t respnd t cncerns nted. A standard-setting prject prpsal is expected t be apprved in Sept 2016, with an ED in late Addressing tpics such as scping and risk assessment, cmmunicatins, identificatin f significant risks, expectatins regarding tests f cntrls, understanding the entity, and the scalability f the standard. 5

9 Other Initiatives Prfessinal skepticism Current Status: Included in the ITC. Discussins abut an apprpriate way frward t enhance auditrs applicatin f prfessinal skepticism in audits are expected in Sept and Dec This tpic is being explred jintly with the Internatinal Ethics Standards Bard fr Accuntants (IESBA) and the Internatinal Accunting Educatin Standards Bard (IAESB). Effects f technlgy n the audit (the Data Analytics prject) Current Status: The IAASB is currently explring emerging develpments in data analytics, and whether changes t the ISAs are needed in light f these develpments. A publicatin t slicit further input will be issued later in 2016 with further cnsideratin in 2017 abut hw best t address this tpic within the ISAs r whether guidance wuld be useful. Interactin with ther prjects nted, such as the prjects addressing auditing accunting estimates and the auditr s understanding f the entity and its envirnment and risk assessment, as well as the quality cntrl standards. Auditr Reprting Implementatin Current status: The IAASB will cntinue t mnitr implementatin f its new and revised auditr reprting standards. The IAASB s cnsideratin f the design f the pst-implementatin review is expected in late Integrated reprting and ther emerging develpments in external reprting Current Status: The IAASB is cnsidering emerging develpments in external reprting, including integrated reprting, in relatin t the need fr assurance n such infrmatin. A discussin paper is expected t be published in Q

10 Agreed-upn prcedures Current Status: The IAASB is currently explring emerging develpments with respect t agreed-upn prcedures and multi-scpe engagements, and whether changes t its related standard (ISRS 4400) are needed in light f thse develpments and user needs.. Incrprates natinal develpments. Discussin Paper is expected t be published later in 2016, with a decisin n standardsetting activities in this area in late Innvatin Wrking Grup Current status: The IAASB s Innvatin Wrking Grup mnitrs develpments in emerging areas f audit, assurance and related services and makes recmmendatins t the IAASB n specific tpics fr the Bard t pursue, including whether there is a need fr a standard-setting respnse. Current mnitring effrts are fcused n crprate gvernance and cybersecurity. In additin, in when prgressing the abve standard-setting prjects, the IAASB will enhance its fcus n the fllwing tw areas: 1. Cnsideratin f matters related t small and medium practices (SMPs) and audits f small- and medium-sized entities (SMEs) As part f each prject and initiative, the IAASB will cntinue t fcus n understanding the issues and implementatin needs f SMPs, including cnsideratin f the ability f the ISAs and the IAASB s standard addressing quality cntrl at the firm level t be applied in a manner prprtinate with the nature and size f the firm r engagement. At the same time, the IAASB will als cntinue t cnsider its Internatinal Standards that address services fr entities that d nt require an audit f financial statements. The IAASB intends t establish a Wrking Grup, including natinal auditing standard setter representatives, t assist it in explring these issues. An event will be held in early 2017 t gather stakehlders t share the practical implicatins f applying the Internatinal Standards and explre hw the IAASB and thers might respnd t the challenges and pprtunities relating t this stakehlder grup. 2. Crdinatin with the Internatinal Ethics Standards Bard fr Accuntants The IAASB has nted that there are issues in certain f its key prjects that are likely t be f relevance t the IESBA, and culd have ptential implicatins t the Cde f Ethics fr Prfessinal Accuntants (the IESBA Cde) (e.g,, in relatin t quality cntrl and grup audits). Similarly, matters under cnsideratin by the IESBA may have implicatins fr the ISAs r ther IAASB Internatinal Standards. The IAASB and IESBA are therefre cnsidering hw best t crdinate in the cntext f specific tpics, where necessary and apprpriate. Althugh bth Bards develp their wrk plans separately in cnsultatin with their stakehlders and cnduct their standard-setting activities independently, there are grwing expectatins frm varius stakehlders that the IAASB and IESBA will be well-crdinated due t the linkages between the ISAs and the IESBA Cde. 7

11 Questin fr Respndents: 2. D yu agree with the IAASB s view that these tpics shuld cntinue t be priritized? Yes / N Why r why nt? If yu believe any prject(s) r initiative(s) shuld nt be priritized, please prvide yur reasns fr this view. 3. Please indicate the relative imprtance f a fcus n the fllwing: Nt imprtant Mderately imprtant Cnsideratin f matters related t SMPs and SMEs Crdinatin with the IESBA Very Imprtant B. Other Tpics Highlighted fr Cnsideratin fr the Wrk Plan All f the prjects and initiatives described abve had been priritized by the IAASB in finalizing its current Wrk Plan, recgnizing that there was a need t establish a wrk plan that was bth realistic and specific in terms f timing f deliverables. In agreeing t the number f prjects and initiatives t cmmence, as well as the challenging nature and extent f issues t be explred in these tpics, there was acknwledgement that (with the exceptin f the prject t revise the auditing standard addressing accunting estimates) the prjects wuld nt be cmpleted in an accelerated timeframe and wuld therefre extend ver mre than ne wrk plan Wrk n all f these tpics is expected t cntinue in the perid. Based n available current capacity and resurces, it is unlikely that any significant new prjects r initiatives can cmmence until at least 2018 withut mdifying the IAASB s current wrk plan. Other tpics have been raised fr the IAASB s cnsideratin in develping the Wrk Plan fr , either thrugh the previus cnsultatin r in discussins n ther prjects, albeit with varying views abut the need t further explre these tpics and whether standard-setting r ther actins are necessary. They are described belw t slicit views frm respndents abut the imprtance f the tpic t respndents and whether these r ther tpics need t be priritized ver ne r mre f the IAASB s current tpics listed abve (and why they believe this t be the case). The IAASB will cnsider these views in develping the final wrk plan fr

12 In the table belw, please indicate the relative imprtance f the tpic t yurself r yur rganizatin, and answer the questins that fllw: Nt imprtant Mderately Imprtant Very Imprtant Tpics that have linkages t current prjects r recently cmpleted prjects where it has been identified that revisin f a specific standard may be needed (in n specific rder) Materiality and evaluating misstatements (ISA 320 and ISA 450) The IAASB cntinues t mnitr the prgress f the IASB n its wrk n materiality. Once the utcmes frm this wrk prvides further insights int the tpic, the IAASB may cnsider a mre hlistic explratin f the ptential implicatins t the auditing standards. Ging cncern, including further actins related t auditr reprting The IAASB cntinues t mnitr develpments in relatin t ging cncern in light f the IASB nt including a prject n aspects f ging cncern in its frward agenda. The Bard is actively cnsidering the implicatins f emerging frms f external reprting (including viability disclsures by the entity). The IAASB is als mnitring develpments f the UK Financial Reprting Cuncil, the US Financial Accunting Standards Bard, the US Public Cmpany Accunting Oversight Bard and thers n the tpic f ging cncern. The IAASB will als priritize the tpic in its pst-implementatin f its Auditr Reprting Standards. Ptential revisin f the IAASB s standard dealing with the use f the wrk f an auditr s expert (ISA 620) Cnsideratin will be given as t whether amendments are needed t the standard dealing with the use f the wrk f an auditr s expert as part f the prject addressing the audit f accunting estimates (ISA 540). 9

13 Nt imprtant Mderately Imprtant Very Imprtant Explring issues related t audit evidence, and ptential revisin f the IAASB s standard dealing with audit evidence (ISA 500) Tpics related t audit evidence are being cnsidered in the prjects addressing prfessinal skepticism, the audit f accunting estimates (ISA 540), and data analytics. Analytical prcedures and audit sampling Cnsideratin will be given in the prject addressing understanding the entity and its envirnment and assessing risks and the Data Analytics prject as t whether amendments may be needed t the standards addressing these tpics (ISA 520 and ISA 530). Ptential revisin f the IAASB s standard addressing the auditr s respnses t assessed risks (ISA 330) Sme cnfrming changes may be made as a result f revisins made t the standard addressing the understanding f the entity and its envirnment and assessing risks (ISA 315). Ptential revisins t the IAASB s standard dealing with the auditr s respnsibilities relating t fraud in the audit f financial statements (ISA 240) Inspectin findings have specifically been nted n this tpic in relatin t the audit f revenue, and sme natinal auditing standard setters have made further imprvements t the standard dealing with the auditr s respnsibilities relating t fraud in the audit f financial statements. Sme cnfrming changes may als be made as a result f revisins made t the standard addressing the understanding f the entity and its envirnment and assessing risks (ISA 315). Further revisin t the IAASB s standard dealing with the auditr s 10 The IAASB recently finalized limited amendments t its standard dealing with

14 Nt imprtant Mderately Imprtant Very Imprtant cnsideratin f laws and regulatins in an audit f financial statements (ISA 250) the auditr s cnsideratin f laws and regulatins in an audit f financial statements (ISA 250) t reslve actual r perceived incnsistencies f apprach between the ISAs and the IESBA s changes fr Nn-Cmpliance with Laws and Regulatins (NOCLAR). Sme stakehlders have suggested a mre fulsme revisin f ISA 250 may be needed, specifically nting the standard is nt funded n the risk-based apprach. Develping a prcess fr pstimplementatin reviews f ther standards, including the IAASB s standards n cmpilatins (ISRS 4410 (Revised) and reviews (ISRE 2400) (Revised)) This tpic is included in the current Wrk Plan but wrk has nt yet cmmenced due t a fcus n ther pririties. Input frm these reviews may result in identificatin f a need fr further revisins t these standards. Tpics identified thrugh utreach, inspectin findings, previus IAASB cnsultatins r ther means Ptential revisin f the IAASB s standard addressing external cnfirmatins (ISA 505) Raised by ne r mre respndents t the cnsultatin n the Wrk Plan fr , in light f the increasing use f electrnic cnfirmatins Ptential further revisin f the IAASB s standard dealing with using the wrk f internal auditrs (ISA 610 (Revised 2013)) Raised by ne r mre respndents t the cnsultatin n the Wrk Plan fr , specifically nting cncerns relating t the use f internal auditrs t prvide direct assistance Ptential revisin f the IAASB s standard addressing the examinatin f prspective financial infrmatin (ISAE 3400) Raised by ne r mre respndents t the cnsultatin n the Wrk Plan fr , specifically nting the standard is nt in the same frmat as 11

15 Nt imprtant Mderately Imprtant Very Imprtant mst recently revised standards (i.e., the clarity frmat) Ptential revisin f the IAASB s standard dealing with the review f interim financial infrmatin perfrmed by the independent auditr f the entity (ISRE 2410) Cnsideratin f whether revisins may be needed will be infrmed by the IAASB s planned pst-implementatin review f its Auditr Reprting standards. Als the standard is nt in the same frmat as mst recently revised standards (i.e., the clarity frmat) Auditr invlvement with earnings releases / preliminary annuncements Raised by stakehlders in previus cnsultatins. Previus discussins have highlighted the difficulty f ptential standard-setting n an internatinal basis, but the IAASB recgnizes the relevance f this infrmatin t investrs. Explring matters related t direct engagements (i.e., where the practitiner prepares the subject matter infrmatin in an assurance engagement) The verarching standard dealing with assurance engagements ther than audits and reviews f histrical financial infrmatin des nt explicitly address direct engagements (where the practitiner, rather than management, prepares the subject matter infrmatin) and it has been suggested that a separate standard wuld be helpful. The IAASB is mnitring natinal develpments in this area. Explring matters relating t jint audits (i.e., where tw r mre auditrs share respnsibility fr the audit and the auditr s reprt) Jint audits are required in certain jurisdictins, but the tpic f jint audits is nt explicitly addressed in the ISAs. If necessary, issues culd be cnsidered as part f the quality cntrl r grup audit prjects. 12

16 Nt imprtant Mderately Imprtant Very Imprtant Overarching cnsideratins relevant t the Internatinal Framewrk fr Assurance Engagements It has been suggested that it wuld be helpful t explre whether changes t the Assurance Framewrk are necessary t underpin the IAASB s standard-setting activities. Other as identified by respndent Please describe the tpic and yur reasn fr including Questin fr Respndents: 4. Yu are invited t share any further views that yu believe may be relevant t the IAASB as it seeks t finalize its Wrk Plan fr

17 SUPPLEMENT TO THE IAASB S CONSULTATION ON ITS STRATEGIC OBJECTIVES AND WORK PLAN FOR Intrductin The fllwing is intended t prvide respndents t the survey with backgrund infrmatin regarding the prcess t cnsider the IAASB s future pririties. The IAASB undertk a survey and an extensive public cnsultatin t develp its Wrk Plan fr (the current wrk plan). Respndents t that cnsultatin agreed that the IAASB was fcused n the right tpics, recgnizing that many were quite cmplex and revised standards were nt likely t be cmpleted within the tw-year perid. The IAASB s extensive utreach in 2015 and 2016 indicates brad supprt fr the Bard s current actins and a desire fr the IAASB t prgress standard-setting tpics as quickly as pssible. Accrdingly, the IAASB and its Cnsultative Advisry Grup (CAG) generally believe that, absent a change in the external envirnment r a strng stakehlder view therwise, the Bard s initiatives shuld cntinue, albeit they may need t be re-priritized. Fr mre infrmatin abut the IAASB, please see the 2014/2015 IAASB Biennial Reprt. Prjects Cmpleted in The fllwing relevant prjects were cmpleted in : The develpment f the IAASB s Framewrk fr Audit Quality The new and revised Auditr Reprting standards, including ISA 701, Cmmunicating Key Audit Matters in the Independent Auditr s Reprt, and changes t the ISA 800 series fr special purpse reprts ISA 720 (Revised), which addresses the auditr s wrk effrt in regard t an entity s annual reprt and what is required t be cmmunicated in the auditr s reprt as a result The Disclsures prject, where revisins were made acrss a number f ISAs t highlight what is expected f auditrs when dealing with financial statement disclsures Limited amendments t the IAASB s Internatinal Standards t address actual r received incnsistencies with the Internatinal Ethics Standards Bard fr Accuntants (IESBA) final prnuncement in its Cde f Ethics fr Prfessinal Accuntants (IESBA Cde) regarding respnding t nn-cmpliance with laws and regulatins (NOCLAR) Onging and Enhanced Initiatives In additin t its extensive utreach prgram, the IAASB invests resurces in a number f imprtant initiatives t cnsider hw it can best serve its public interest mandate nt nly t infrm its standardsetting activities, but als t supprt the adptin and effective implementatin f its standards.

18 The fllwing mre significant activities are expected t cntinue in : IAASB-Internatinal Accunting Standards Bard (IASB) Liaisn The IAASB will cntinue t mnitr IASB prnuncements fr auditability and verifiability issues, as well as t cnsider whether there is a need fr the IAASB t address the auditr s effrts in relatin t new r amended financial reprting prnuncements (in particular, thse that require the applicatin f significant judgment) thrugh changes t the ISAs r ther utputs. In additin, the IAASB will cntinue t liaise and cllabrate with the IASB n tpics f mutual interest (e.g., materiality, disclsure, ging cncern, integrated reprting and matters addressing the IAASB s prject t revise ISA 540). Innvatin The IAASB s Innvatin Wrking Grup has the remit t mnitr develpments in emerging areas f audit, assurance and related services and make recmmendatins t the IAASB n specific tpics fr the IAASB t pursue, including whether there is a need fr a standard-setting respnse. These recmmendatins will take int accunt whether there is a visible market demand fr audit, assurance and related services in the public interest, including the ptential need fr the IAASB t enhance the quality f engagements that are currently cnducted n a widespread basis internatinally r are expected t be in the near future. The Innvatin Wrking Grup will als cntinue t mnitr ther emerging areas initially identified by the IAASB and the CAG, and with a high level f interest t the NSS, and reprts t the IAASB at least annually r n identified emerging tpics and which f thse are cnsidered t be pririty tpics fr further attentin by the Innvatin Wrking Grup r by separate wrking grups. In additin, the Innvatin Wrking Grup will cnsider whether tpic-specific backgrund papers r presentatins by subject-matter experts may be useful t further infrm the IAASB and CAG abut thse tpics. Research Academic research is an imprtant input int standard setting. The IAASB will cntinue t wrk with the Internatinal Assciatin fr Accunting Educatin & Research (IAAER) and thers t identify pprtunities t engage academics n tpics f mutual interest. As a matter f pririty in , the IAASB will enhance its fcus n the fllwing tw areas when prgressing its standard-setting prjects: Cnsideratin f matters related t small and medium practices (SMPs) and audits f small- and medium-sized entities (SMEs) As part f each prject and initiative, the IAASB will cntinue t fcus n understanding the issues and implementatin needs f SMPs, including cnsideratin f the ability f the ISAs and the IAASB s standard addressing quality cntrl at the firm level t be applied in a manner prprtinate with the nature and size f the firm r engagement. At the same time, the IAASB will als cntinue t cnsider its Internatinal Standards that address services fr entities that d nt require an audit f financial statements. The IAASB intends t establish a Wrking Grup, including natinal auditing standard setter representatives, t assist it in explring these issues. An event will be held in early 2017 t gather stakehlders t share the practical implicatins f applying the Internatinal Standards and explre hw the IAASB and thers might respnd t the challenges and pprtunities relating t this stakehlder grup. Crdinatin with IESBA The IAASB has nted that there are issues in certain f its key prjects that are likely t be f relevance t the IESBA, and culd have ptential implicatins t the IESBA 2

19 Cde (e.g,, in relatin t quality cntrl and grup audits). Similarly, matters under cnsideratin by the IESBA may have implicatins fr the ISAs r ther IAASB Internatinal Standards. The IAASB and IESBA are therefre cnsidering hw best t crdinate in the cntext f specific tpics, where necessary and apprpriate. Althugh bth Bards develp their wrk plans separately in cnsultatin with their stakehlders and cnduct their standard-setting activities independently, there are grwing expectatins frm varius stakehlders that the IAASB and IESBA will be wellcrdinated due t the linkages between the ISAs and the IESBA Cde. Imprtant Cnsideratins in Cnsulting n the IAASB s Wrk Plan fr The discussin belw utlines key cnsideratins evaluated by the Bard and its Staff in cnsulting n its Wrk Plan fr The IAASB recgnizes the imprtance f rganizing and cnducting its activities in the mst effective and efficient way, and the need fr nging cnsideratin f pprtunities t enhance the way it perates. Further, there is need fr nging cnsideratin f the verall capacity f the IAASB and its staff cmplement, and t explre pprtunities t expand that capacity, fr example thrugh cllabratin and cperatin with thers n particular prjects r by sharing staffing resurces. The IAASB has been giving specific attentin t these matters since 2014, and will cntinue t d s thrughut the strategy perid. Balance f Resurces between the IAASB, Its Chairman and Its Staff With the exceptin f the full-time Chairman, all IAASB members participate n a vlunteer basis. As such, there are limitatins n the available Bard time that can be devted t particular prjects, bth during IAASB meetings and thrugh prject task frce and wrking grup meetings. Prject task frces and wrking grups are chaired by IAASB members, and cmprise IAASB members, IAASB technical advisrs, and thers with relevant expertise. These prject task frces and wrking grups typically meet at least nce between each IAASB meeting. Each IAASB member rdinarily participates in tw r mre prject task frces r wrking grups. Bard members may be asked t participate in the IAASB Cnsultative Advisry Grup (CAG) meetings and liaisn meetings with natinal auditing standard setters (NSS), and utreach activities in their particular jurisdictins. The full-time IAASB Chairman, IAASB members and senir Staff undertake a significant level f utreach activity, speaking at cnferences and meetings f rganizatins interested in the wrk f the IAASB, engaging in dialgue with key stakehlders mving ahead with adptin f the ISAs, participating in discussins abut the regulatry envirnment in which auditrs perate, and furthering the wrk f the IAASB in a number f frums. Each standard-setting prject is supprted by at least ne Staff member (ften tw), wh is respnsible fr rganizing Bard and task frce meetings, develping issues papers and draft standards, guidance r ther publicatins fr cnsideratin by the prject task frce r wrking grup, revising these materials fr discussin by the Bard, and preparing minutes fr Bard discussins. In additin t managing prjects, IAASB Staff develp publicatins such as Staff Audit Practice Alerts, Staff Questins and Answers, press 3

20 releases and prject updates fr individual prjects, explanatry memranda that accmpany expsure drafts, and bases fr cnclusins that accmpany final prnuncements. They are als invlved in liaisn activities and prepare relevant materials t supprt IAASB cmmunicatin activities and the Chairman s utreach effrts. Staff als supprt the develpment f the agendas and material fr the semi-annual IAASB CAG and annual IAASB-NSS liaisn meetings, and have respnsibility fr reprting t the Public Interest Oversight Bard (PIOB). Key Assumptins The IAASB s future capacity fr its Wrk Plan fr has been based n the fllwing key assumptins: The IAASB will cntinue t be funded exclusively by the Internatinal Federatin f Accuntants (IFAC), and accrdingly will be subject t budgetary cnstraints. Budgets, including staffing cmplements, are determined apprximately 18 mnths in advance, and are expected t be cnsistent with past levels. The Bard cmprises a full-time remunerated Chairman and 17 vlunteer members wh are asked t cntribute apprximately 650 hurs per year (800 hurs if serving as a task frce r wrking grup chair). The Bard is cmprised f a balance f practitiner and nn-practitiner members, which includes at least three public members whse travel csts are brne by the IAASB. There are 9 full-time technical staff and 3 full-time administrative staff members supprting the Bard s peratins. The IAASB generally meets fr five days, fur times per year, and usually hlds a telecnference each quarter. The number f prjects that can be discussed at each IAASB meeting varies depending n the stage f the prject. Detailed wrk n prjects is undertaken by task frces and wrking grups drawn frm the membership f the IAASB and IAASB technical advisrs and which may include external experts frm relevant rganizatins (e.g., regulatrs, NSS, subject matter experts, representatives frm the public sectr and SMP cmmunities, and thers). The develpment f all standards and prnuncements is dne fllwing cmprehensive due prcess. This includes cnsultatin with the IAASB CAG and public expsure, typically 120 days. Mst prjects take a minimum f 36 mnths t cmplete, assuming apprximately five prjects are discussed at each meeting. Hwever, the verall time needed is als dependent n the cmplexity f the subject matter, including the assessment f the need t issue cnsultatin papers r t cnduct significant research r ther utreach in advance f the issuance f an expsure draft, as well as the disparity f views frm different stakehlders. The cmmencement f any new standard-setting prject is subject t IAASB apprval f a prject prpsal designed t identify the bjective(s) f the prject and hw achievement f thse bjectives wuld serve the public interest. 4

21 The Wrk Plan fr includes time t allw fr research activities, educatin sessins t further infrm the IAASB s debates, utreach and direct interactin with interested stakehlders, and develpment f cmmunicatins relating t individual prjects. These activities may be undertaken befre the develpment f a prject prpsal, in particular when it may nt be clear at the nset f the IAASB s discussins as t the apprpriate utcme(s) f a prject t serve the public interest, fr example, whether ne f the fllwing, r sme cmbinatin theref, wuld be an apprpriate respnse t the issue that had been identified: Standard-setting activities; Implementatin guidance in the frm f a nn-authritative Practice Nte r in sme ther frm; r Staff publicatins. Factrs Guiding the Identificatin f Ptential Pririties and Actins in Future Wrk Plans While there are calls frm many stakehlders fr IAASB effrts n a variety f imprtant tpics, the IAASB must priritize its actins in light f its strategic bjectives, available resurces and the mdel established by the its terms f reference. In cnsultatin with its stakehlders, the IAASB has identified certain criteria t enable it t make decisins regarding which actins shuld be included in future wrk plans and hw such actins can be priritized. Such criteria include the fllwing: The IAASB s views abut the urgency in the public interest f the need fr change, and the ptential implicatins if actin is delayed, taking int accunt bth the demands f the capital markets and the impact n businesses f all sizes. The need fr change t enhance audit quality glbally, r t enhance the quality f engagements that are currently cnducted n a widespread basis internatinally r are expected t be in the near future, and the degree t which such change wuld further facilitate high-quality financial and crprate reprting and enhance public cnfidence therein. The degree t which an identified issue wuld be addressed effectively thrugh change t the standards r thrugh ther apprpriate actin by the IAASB. In this regard, cnsideratin may need t be given as t the apprpriate time t undertake a standard-setting respnse in light f emerging practice, market demand and the pssibility f develping a standard capable f internatinal applicatin. The glbal applicability f the ptential actins, fr example in relatin t entities f different sizes and cmplexity, different industries, and acrss jurisdictins, with acknwledgement f the ptential impact assciated with these actins. Feedback received frm public cnsultatin n the IAASB s strategy and wrk plans, utreach activities and discussins with the CAG as well as the PIOB are taken int accunt in the IAASB s cnsideratin f hw best t fulfill its public mandate in adding initiatives t its Wrk Plan, recgnizing the diverse needs f the wide range f its stakehlders. 5

22 Strengthening Organizatins, Advancing Ecnmies Press Releases/News Alerts Jul 25, 2016 New Yrk, New Yrk English Keep Updated Get the latest news delivered t yur inbx. IAASB Issues Public Survey t Infrm Its Wrk Plan fr The Internatinal Auditing and Assurance Standards Bard (IAASB) tday released a survey cnsultatin, The IAASB s Wrk Plan fr and Cntinuing Relevance f Its Strategic Objectives. Feedback t this cnsultatin will assist the bard in evaluating its pririties fr and allcating its resurces a fulltime Chairman supprted by a 17-persn vlunteer bard and ten-persn technical staff in the best way pssible. Our extensive utreach and cnsultatin, mst recently thrugh ur Invitatin t Cmment, leads us t believe we are already addressing the mst pertinent tpics in the public interest. We are priritizing standard setting in relatin t the fundamental tpics f accunting estimates, prfessinal skepticism, quality cntrl, risk assessment, and grup audits while at the same time actively debating the implicatins fr practitiners f develpments in data analytics, integrated reprting, and emerging frms f external reprting, explained Prf. Arnld Schilder, IAASB Chairman. At the same time, we recgnize we will sn be at the mid-pint f ur fiveyear strategy, s it is helpful t pause and reflect with ur stakehlders abut whether anything in the external envirnment indicates a need t change curse r re-priritize. The IAASB and its Cnsultative Advisry Grup have cnsidered a number f ther tpics that culd warrant IAASB attentin, which are highlighted in the survey. Respndents are asked fr their views n hw tpics shuld be priritized, recgnizing that much f the bard s current standard-setting effrts will carry n int 2017 and beynd unless the IAASB decides t mdify its current wrk plan. The IAASB wuld als like t understand whether its current strategic initiatives remain apprpriate given its mandate. We lk frward t hearing frm a wide range f ur stakehlders, and hpe that by using a survey, we will hear frm many arund the wrld, Kathleen Healy, IAASB Technical Directr, nted. We have designed the survey t allw respndents t quickly flag key pririties r, alternatively, tell us when certain tpics are less relevant as this will be helpful in deciding whether ur fcus shuld change frm any f ur current pririties t thse that might be deemed mre relevant frm a public interest perspective. The survey will be pen fr respnses thrugh September 30, 2016, and must be submitted using the nline tl. A PDF versin f the survey has been prvided t assist rganizatins that may need t cnsult internally in preparing their respnse befre submitting it electrnically. Abut the IAASB The IAASB develps auditing and assurance standards and guidance fr use by all prfessinal accuntants under a shared standard-setting prcess invlving the Public Interest Oversight Bard, which versees the activities f the IAASB, and the IAASB Cnsultative Advisry Grup, which prvides public interest input int the develpment f the standards and guidance. The structures and prcesses that supprt the peratins f the IAASB are facilitated by the Internatinal Federatin f Accuntants (IFAC). Fr cpyright, trademark, and permissins infrmatin, please g t permissins r cntact permissins@ifac.rg.