ICAS’ response to IAASB’s proposed strategy for 2024 to 2027
We have responded to IAASB’s proposed strategy for 2024-2027 highlighting some concerns, but broadly supporting the strategy.
We recently responded to the International Auditing and Assurance Standards Board (IAASB)’s proposed strategy for 2024 to 2027.
Although we expressed broad support for the IAASB’s proposed strategy, we did highlight concerns that stakeholders and practitioners are experiencing standard setting fatigue due to the number of consultations that have been issued in recent years. Additionally, in order to continue to have the ability to absorb the impact of unexpected change, we highlighted that the IAASB’s workplan should incorporate contingency space to facilitate both the possibility of the squeezing in of any new projects and to address the possibility of expansion of planned projects.
We also questioned whether increased specificity, as is being sought by some regulators and oversight bodies, was the best means of dealing with increasing complexity. There is a risk that doing so moves the IAASB beyond principles based standards to a checklist rules-based approach, thus reducing and not improving audit quality. We appreciate that this is not an easy balance to strike but the increasing length of most of the new ISAs is not a welcome trend. We also questioned whether such length acts as a deterrent to entrants to the profession. It is critical that the IAASB is focused on developing principles-based standards that are well-understood and enable consistent application by practitioners.
On specific proposed initiatives, we expressed support to the IAASB for the following:
- The IAASB’s current and proposed continued focus on assurance relating to sustainability-related information.
- Revising ISA 320 ‘Materiality in planning and performing an audit’ to address issues and challenges related to consistency in the determination and revision of materiality and performance materiality, and to clarify the application of these concepts within a risk-based audit.
- Revising ISA 330 ‘The auditor’s responses to assessed risks’ to better align the requirements with changes made to the risk identification and assessment standard (ISA 315 (Revised 2019) ‘Identifying and assessing the risks of material misstatement’) and changes in proposed ISA 500 (Revised) ‘Audit evidence’. This would include revisions to modernize ISA 330 as necessary, in particular in relation to technology.
- To undertake a broad-spectrum update of the ISAs for the impact of technology. This would include the ISA 500 series (audit evidence).
- Revising ISA 620 ‘Using the work of an auditor’s expert’ to appropriately align with concepts in recently revised standards, including ISA 540 (Revised) ‘Auditing accounting estimates and related disclosures and ISA 220 (Revised) ‘Quality management for an audit of financial Statements’, and the changes in proposed ISA 500 (Revised).
- Revising ISA 720 (Revised) ‘The auditor’s responsibilities relating to other information’ to clarify the concepts underlying the auditor’s responsibilities and to address implementation issues and challenges that have been highlighted as part of the post-implementation review of the revised audit reporting standards.
- Revising International Standard on Review Engagements (ISRE) 2410.
