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Auditing and assurance

Auditing and assurance. Lecture 3a Regulatory Auditing Bodies – UK and RoI (Hong Kong SAR, Malaysian and Singaporean institutions may study equivalent auditing bodies of their countries). RSB’s and RQB’s in the British Isles. SMALLER RSB/RQB’s AAPA (RSB only) IIPA ICPAI AIA (RQB only)

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Auditing and assurance

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  1. Auditing and assurance Lecture 3a Regulatory Auditing Bodies – UK and RoI (Hong Kong SAR, Malaysian and Singaporean institutions may study equivalent auditing bodies of their countries)

  2. RSB’s and RQB’s in the British Isles SMALLER RSB/RQB’s • AAPA (RSB only) • IIPA • ICPAI • AIA (RQB only) • CIPFA (RQB only) MAJOR RSB/RQB’s • ACCA • ICAEW • ICAI • ICAS

  3. A brief history of audit regulation • 1900 – ICAEW -‘Standard Audit Report’ • 1961 – ICAEW - U-Statements • 1973 – ICAEW - Standards Committee formed • 1970’s - Appearance of ‘The Expectation Gap’ • 1976 - CCAB formed theAPC • Body to supervise and guide auditors • Mainly run by practising, unpaid auditors • Issued Audit Guidelines (AG’s) • Issued Audit Standards

  4. A brief history of audit regulation (cont.) • 1977 - IAPCfounded by IFAC • 1991 - CCAB formed theAPB • More independent than APC • Lay members • 2000 - ‘New’ APB • More independent than previous APB • Controlled by ‘The Foundation’ • 2002 - IAPC • renamed IAASB

  5. A brief history of audit regulation (cont.) • 2003 - ‘New’ new APB ! • More independent than previous APB's • Controlled by The FRC • 2005 - FRC (UK) • Oversight Board established • Professional Oversight Board for Accounting (POBA)

  6. A brief history of audit regulation (cont.) • 2005 - APB • Move to International Standards of Auditing (ISA’s) • Adoption started 15.12.04 • IAS (UK and Ireland) • Cover instances where SAS’s contain higher standards than the equivalent ISA’s • National laws and regulations

  7. A brief history of audit regulation (cont.) • 2005 - Irish Auditing and Accounting Supervisory Authority (IAASA) set up • 2005 - Companies (Audit, Investigation and Community Enterprise) Act 2005 • 9th Sept 2005: POBA made responsible for recognition, supervision and de-recognition of RSB’s and RQB’s

  8. A brief history of audit regulation (cont.) • 2005 - IFAC (parent of the IAASB) • Public Interest Oversight Board established (PIOB) • 2005 - FRC • POBA renamed POB • 2006 - European Group of Auditors’ Oversight Bodies (EGAOB) set up • 8th Company Law directive

  9. A brief history of audit regulation (cont.) • 2006 - Companies Act 2006 • Mainly consolidation as far as accounting and audit matters • Minor changes • Except matters relating to SME (Advanced AAS) • 2006 - International Forum of Independent Audit Regulators (IFIAR) set up • To aid international collaboration and audit quality

  10. A brief history of audit regulation (cont.) • 2009 - IAASB ‘Clarity project’ • Started replacement of all ISA’s from 15.12.07 • Standards (ISA’s) are: • Objective-based • ‘over-arching objective’ • Clarify professional requirements • ‘shall’ indicates a mandatory action • ‘Application material’ (non-mandatory) • Drafted in a usable structure • Drafted in clear language

  11. A brief history of audit regulation (cont.)The structure of the clarified ISA’s • ‘IntroductionIntroductory material may include information regarding the purpose, scope, and subject matter of the ISA, in addition to the responsibilities of the auditors and others in the context in which the ISA is set • Objective Each ISA now contains a clear statement of the objective of the auditor in the audit area addressed by that ISA

  12. A brief history of audit regulation (cont.) The structure of the clarified ISA’s • DefinitionsFor greater understanding of the ISA’s, applicable terms have been defined in each ISA • RequirementsEach objective is supported by clearly stated requirements. Requirements are always expressed by the phrase “the auditor shall”

  13. A brief history of audit regulation (cont.) The structure of the clarified ISA’s • Application and other explanatory materialThe application and other explanatory material explains more precisely what a requirement means or is intended to cover, or includes examples of procedures that may be appropriate under given circumstances’ – IAASB, July 2009

  14. A brief history of audit regulation (cont.) 2010 – APB • Clarified and adjusted ISA standards • Adoption in the British Isles from FS’s year-endings 30/9/10 and thereafter.

  15. Auditing Supervision in the British Isles The Financial Reporting Council • The Auditing Practices Board (APB) • The Accounting Standards Board (ASB) • The Financial Reporting and review panel (FRRP) • The Professional Oversight Board (POB) • The Investigation and Discipline Board (IDB) • The Board for Actuarial Standards (BAS)

  16. Auditing Supervision in the British Isles • The Auditing Practices Board (APB) issues: • Auditing standards • ISA(UK and Ireland) • formally SAS’s • and other standards • Practice Notes (PN’s) • Bulletins • Advisory matter to support standards

  17. APB publications • Statements of Auditing Standards • ISA(UK & Ireland) • SAS • Mandatory • Practice Notes (PN’s) • Advisory (‘PN 14’) • Bulletins • Advisory (‘2008/6’)

  18. APB publications (cont.) • Other Standards • Investment circular reporting (SIR’s) • Ethical Standards (ES's) • Discussion Papers • Leads to ED • Exposure Drafts (ED’s) • Leads to standard • Various other papers

  19. Auditing Supervision - International • The International Auditing and Assurance Standards Board(IAASB, formally the IAPC) • Parent organisation: IFAC • Issues (generic) International Standards on Auditing (ISA’s)

  20. IAASB publications • Mandatory, but do not override local national standards • International Standards on Auditing (ISA’s) • International Standards on Review Engagements (ISRE’s) • International Standards on Related Services (ISRS) • International Standards on Assurance Engagements (ISAE) • International Standards on Quality Control (ISQC)

  21. IAASB publications • Advisory • International Audit Practice Statements (IAPS’s) • Updating and topical advice is also issued • Such as ‘IAASB eNews’

  22. Further information • AAPA - http://www.accaglobal.com/documents/aapa_memb_app.pdf • ACCA - http://www.accaglobal.com/ • AIA - http://www.aiaworldwide.com/ • APB - http://www.frc.org.uk/apb/ • Chinese ICPA - http://www.cicpa.org.cn/english/ • CIPFA - http://www.cipfa.org.uk/ • CPA Singapore - http://www.accountants.org.sg/ • HKCPA - http://www.hkicpa.org.hk// • IAASB - http://www.ifac.org/iaasb/

  23. Further information (cont.) • ICAEW - http://www.icaew.com/index.cfm/route/158423/icaew_ga/en/Home/Institute_of_Chartered_Accountants_in_England_and_Wales • ICAI - http://www.icai.ie/ • ICAS - http://www.icas.org.uk/site/cms/contentChapterView.asp?chapter=605 • ICPAI - http://www.cpaireland.ie/ • MIA - http://www.mia.org.my/new/ • MICPA - http://www.micpa.com.my

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