Objective
Objective
The objective of this project was to redraft the close off document of ISA 706 (Revised), Emphasis of Matter Paragraphs and Other Matter(s) Paragraphs in the Independent Auditor's Report, in accordance with the clarity drafting conventions agreed by the IAASB to be applied to all ISAs.
The IAASB approved ISA 706 (Revised and Redrafted), Emphasis of Matter Paragraphs and Other Matter Paragraphs in June 2008. The ISA is effective for audits of financial statements for periods beginning on or after December 15, 2009. A Basis for Conclusions will provide background to the project, main comments received on the exposure draft, and the IAASB's conclusions regarding these comments in developing the final standard.
Background
In March 2005, the IAASB issued an exposure draft of proposed ISA 706, Emphasis of Matter Paragraphs and Other Matter(s) Paragraphs in the Independent Auditor's Report.
The IAASB gave due consideration to the comments received on the proposed ISA. The basis for the IAASB's conclusions is explained in the Basis for Conclusions: Close Off Document - ISA 706 (Revised).
The IAASB approved the close off document of ISA 706 (Revised) (i.e., following the IAASB's current drafting conventions) in July 2006. That document incorporates the changes based on the comments received on the March 2005 exposure draft.
Task Force progress / Board discussions to date
In July 2007, the IAASB approved an exposure draft of proposed ISA 706 (Revised and Redrafted), Emphasis of Matter Paragraphs and Other Matter(s) Paragraphs in the Independent Auditor's Report. The proposed ISA has been redrafted in accordance with the clarity drafting conventions agreed by the IAASB to be applied to all ISAs.
At the June 2008 meeting, the IAASB discussed a Summary of Significant Comments and Task Force Recommendations and proposed final ISA 706 9Revised and Redrafted).
Significant comments relating to ED-ISA 706 (Revised and Redrafted) included a revised objective and clarification within the ISA relating to the requirements in other ISAs for the auditor to include Emphasis of Matter paragraphs and Other Matter paragraphs in certain circumstances. Additionally, the IAASB agreed that material in proposed ISA 700 (Redrafted), Forming an Opinion and Reporting on Financial Statements, relating to Other Matter paragraphs should be moved to ISA 706 (Revised and Redrafted).
The IAASB approved ISA 706 (Revised and Redrafted), Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor's Report as a final standard in June 2008.
The ISA will be published after the Public Interest Oversight Board has confirmed that due process was followed in its development.