Auditing accounting estimates CSA 540
CAS 540 is being revised to establish more robust requirements and provide detailed guidance for auditors when performing procedures in relation to accounting estimates and related disclosures. These revisions will emphasize the importance of using professional skepticism when auditing accounting estimates.
ISA projects:
Engagement Quality Control Review – ISQC 2
This new standard will be aimed at enhancing the requirements and application material in relation to the firm’s EQC reviews, including
a) setting more robust criteria for firms to apply when determining which engagements should be subject to an EQC review,
b) establishing the objective of an EQC review,
c) clarifying the nature, timing and extent of the EQC review and
d) enhancing the requirements for the eligibility of the individuals who perform the review.
In doing so, consideration will also be given to maintaining the appropriate balance between the respective roles and responsibilities of the EQC reviewer and the engagement partner who retains overall responsibility for the engagement.
Quality Control at Engagement Level – ISA 220
The objectives of this project are to:
a) Propose revisions to ISA 220 to strengthen aspects of quality management for individual engagements by focusing on the identification, assessment and response to quality risks in a broad range of engagement circumstances.
b) Propose consequential amendments to other standards that may be necessary as a result of revisions to ISA 220.
c) Determine whether non-authoritative guidance and support tools should be developed by the IAASB or others to supplement the revisions or new standard(s).
Quality Control at Firm Level – ISQC 1
The objectives of this project are to:
d) revisit specific aspects of the quality control standards to enhance clarity and consistency of their application.
e) Providing additional requirements or guidance within the standard or additional guidance in support of the standard.
f) Addressing specific aspects such as governance, engagement partner responsibilities, engagement quality control reviews, monitoring, remediation, alternative audit delivery models and specific issues pertaining to small- and medium-sized practices.
ISA 315 (Revised)
The objectives of the project are to:
a) Propose revisions to ISA 315 (Revised), establishing more robust requirements and appropriately detailed guidance to drive auditors to perform appropriate risk assessment procedures in a manner commensurate with the size and nature of the entity.
b) Determine whether and how ISA 315 (Revised), in its organization and structure, can be modified to promote a more effective risk assessment.
c) Propose consequential amendments to other standards that may be necessary as a result of revisions to ISA 315 (Revised) (such as ISA 220, ISA 240, ISA 330 ISA 540 and ISA 600).
d) Determine what non-authoritative guidance and support tools should be developed by the IAASB, or others, to supplement revisions to ISA 315 (Revised) thereby aiding its effective implementation.