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AIA

IAASB looks for improved clarity

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3rd Nov 2005
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The International Auditing and Assurance Standards Board (IAASB) has launched an 18-month programme to clarify standards through new drafting guidelines.

Exposure drafts of four proposed standards have been re-drafted in the new style:

* ISA 240, The Auditor's Responsibility to Consider Fraud in an Audit of Financial Statements
*ISA 300, Planning an Audit of Financial Statements
* ISA 315, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement
* ISA 330, The Auditor's Procedures in Response to Assessed Risks.

The IAASB has also issued an exposure draft of proposed amendments to the Preface to the International Standards on Quality Control, Auditing, Assurance and Related Services and an Explanatory Memorandum to accompany the exposure drafts.

Key elements of the new drafting style include: basing the standards on objectives, rather than procedural considerations; using 'shall' to identify requirements that the professional accountant is expected to follow in the vast majority of engagements; eliminating the present tense to describe actions by the professional accountant, which some had regarded as ambiguous in terms of obligation; and structural improvements to enhance the overall readability of the standards.

"The Clarity Project was undertaken primarily to deal with our use of the present tense, which it had been suggested was ambiguous in effect," said IAASB chairman John Kellas. "We have also taken the opportunity to make changes to improve our drafting conventions to ensure that IAASB standards are understandable and capable of being translated and to facilitate international convergence."

Comments on the four exposure drafts are invited by February 28, 2006. The documents can be found here

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