The Conforming and Consequential Amendments to the IAASB’s Other Standards as a Result of the New and Revised Quality Management Standards are the limited amendments to the IAASB’s suite of standards in response to the quality management standards. The amendments address any actual or perceived inconsistencies between the quality management standards and the full suite of IAASB standards to ensure that all the standards operate in conjunction with each other without conflict.

The International Auditing and Assurance Standards Board (IAASB) approved a new work plan, A Public Interest Focus in Uncertain Times, during its December 2021 meeting. Pending approval by the Public Interest Oversight Board (PIOB), anticipated in early April 2022, the work plan will guide the IAASB’s work in 2022 and 2023, reflecting the IAASB Strategy for 2020-2023.

Sustainability and environmental, social, and governance (ESG) assurance are a prominent addition to the new work plan and will see increased time and resourcing for 2022–2023. In addition, the new work plan highlights candidate topics in the Audit and Review space (e.g., responding to assessed risks of material misstatement and the impact of technology on various standards) that the IAASB will consider for a further project to commence in 2023. A key focus will remain the progression and completion of projects underway at the start of 2022, including audits of financial statements of less complex entities, audit evidence, going concern, and fraud.

“Based on the increasing global attention, and urgency, around sustainability/ESG reporting and the assurance thereof, the IAASB is dedicating additional capacity and resources to this workstream. We are committed to acting with a sense of urgency, building off our existing platform of assurance standards that are already used worldwide,” according to IAASB Chair Tom Seidenstein. “Our collaboration with others and an expedited information gathering phase will allow us to determine the precise scope and timing of our efforts so we take the right action to meet the growing public demand.”

“While we’re awaiting PIOB approval, we want our stakeholders to know what is on our program for this year and 2023, and be able to plan accordingly,” said IAASB Technical Director Willie Botha. “The initiatives and projects in our work plan, especially sustainability/ESG assurance, are those our board believes currently are the most pertinent public interest issues to address in ensuring the continued credibility and confidence in our work as global audit and assurance standard setter.”

Extended External Reporting Guidance Renamed

To help stakeholders more readily identify and understand available guidance for assurance of sustainability/ESG reporting, the IAASB agreed to rename a key piece of guidance. The newly renamed Non-Authoritative Guidance on Applying ISAE 3000 (Revised) to Sustainability and Other Extended External Reporting Assurance Engagements was originally released in April 2021. It responds to key stakeholder-identified challenges commonly encountered when applying International Standard on Assurance Engagements 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information to such engagements.

About the IAASB
The International Auditing and Assurance Standards Board develops auditing and assurance standards and guidance for use by all professional accountants under a shared standard-setting process involving the Public Interest Oversight Board, which oversees the activities of the IAASB, and the IAASB Consultative Advisory Group, which provides public interest input into the development of the standards and guidance. The structures and processes that support the operations of the IAASB are facilitated by the International Federation of Accountants (IFAC). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org.

The IFAC-IAASB less complex entities survey—part of the IAASB’s consultation on audits of financial statements of less complex entities—is open until January 14. While the IAASB encourages all interested stakeholders to respond to the consultation in writing, the survey provides a way to participate and provide feedback that is less time and resource intensive. The survey is available in English, French and Spanish by clicking the language selector in the survey’s top right corner. Survey responses will be analyzed by the IAASB alongside all other feedback and help shape the final standard; individual survey responses are confidential.

For additional information on the IAASB’s proposed new standard for audits of less complex entities, which was issued in July for a six-month consultation, visit iaasb.org/less-complex-entities.

The IFAC-IAASB less complex entities survey—part of the IAASB’s consultation on audits of financial statements of less complex entities—is open until January 14. While the IAASB encourages all interested stakeholders to respond to the consultation in writing, the survey provides a way to participate and provide feedback that is less time and resource intensive. The survey is available in English, French and Spanish by clicking the language selector in the survey’s top right corner. Survey responses will be analyzed by the IAASB alongside all other feedback and help shape the final standard; individual survey responses are confidential.

For additional information on the IAASB’s proposed new standard for audits of less complex entities, which was issued in July for a six-month consultation, visit iaasb.org/less-complex-entities.

As technology advances and the world becomes more complex, the professional accountant’s skills and competencies, underpinned by ethics and recognizing their public interest responsibility, are critical in navigating new challenges and opportunities and ensuring trust in the profession. To help professional accountants and stakeholders better understand these topics, the Chartered Professional Accountants of Canada (CPA Canada), the Institute of Chartered Accountants of Scotland (ICAS), the International Ethics Standards Board for Accountants (IESBA), and the International Federation of Accountants (IFAC) have released Technology is a double-edged sword with both opportunities and challenges for the accountancy profession, the second in a four-part thought leadership series examining the professional accountant’s role in a new technological era.

The publication examines the impact of rapid technological change and the importance of ethical leadership from the lens of the professional accountant. It also provides practical guidance to both professional accountants and professional accountancy organizations.

Technology is a double-edged sword with both opportunities and challenges for the accountancy profession follows Complexity and the professional accountant: Practical guidance for ethical decision-making, the first publication in the series, and builds off a collaborative exploratory paper and global roundtable event called Ethical Leadership in an Era of Complexity and Digital Change, which CPA Canada, ICAS and IFAC jointly hosted earlier in 2021. The third and fourth publications in the series will focus on identifying and mitigating bias and mis-/disinformation, and mindset and enabling skills.

The publication is available on the IFAC Knowledge Gateway and the IESBA’s webpage Technology: Ethics & Independence Considerations.

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About CPA Canada
Chartered Professional Accountants of Canada (CPA Canada) works collaboratively with the provincial, territorial and Bermudian CPA bodies, as it represents the Canadian accounting profession, both nationally and internationally. This collaboration allows the Canadian profession to champion best practices that benefit business and society, as well as prepare its members for an ever-evolving operating environment featuring unprecedented change. Representing more than 220,000 members, CPA Canada is one of the largest national accounting bodies worldwide. cpacanada.ca

About ICAS
The Institute of Chartered Accountants of Scotland (ICAS) is the global professional body for Chartered Accountants. We educate, examine and lead, enabling excellence whilst always working for the wider public good. All 23,000 ICAS members have earned our world-class CA designation of Chartered Accountant, the qualification that’s shaped an international business community spanning industries and continents, full of local heroes and corporate leaders. And we continually foster the bonds between our members, so CAs at all stages of their careers can learn from shared experience and connect their ambitions to success. For further information please visit – icas.com.

About IESBA

The International Ethics Standards Board for Accountants (IESBA) is an independent global standard-setting board. The IESBA’s mission is to serve the public interest by setting ethics standards, including auditor independence requirements, which seek to raise the bar for ethical conduct and practice for all professional accountants through a robust, globally operable International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code).

About IFAC

The International Federation of Accountants (IFAC) is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. Comprised of 180 members and associates in more than 130 countries and jurisdictions, IFAC represents more than 3 million accountants in public practice, education, government service, industry and commerce.

Over four decades, IFAC has represented the global profession and supported the development, adoption, and implementation of international standards that underpin the contributions of today’s global accountancy profession. IFAC has maintained a long-term approach to building and strengthening a global accountancy profession that supports transparent, accountable, and sustainable organizations, financial markets, and economies.

This paper is the second of four thought leadership pieces that build on a collaborative exploratory paper and global roundtable event held jointly with Chartered Professional Accountants of Canada (CPA Canada) and the Institute of Chartered Accountants of Scotland (ICAS), entitled Ethical Leadership in an Era of Complexity and Digital Change. The exploratory paper, a summary of the event, and an on-demand recording are available here.

Momentum is gathering for increased sustainability/environmental, social, and governance (ESG) reporting requirements for companies. Investors, policymakers, and a broad range of stakeholders seek higher quality, increasingly standardized reporting on companies’ performance on non-financial measure. And with this, demand for assurance engagements that enhance the degree of confidence of the intended users of sustainability/ESG reporting is growing.

We at the International Auditing and Assurance Standards Board (IAASB), the independent audit and assurance standard setter serving more than 130 countries, expect the drive for added corporate reporting and disclosure on sustainability and climate-related information only to accelerate. We see the trend moving from voluntary reporting commitments to requirements mandated by jurisdictions throughout the world. The European Union’s proposed Corporate Sustainability Reporting Directive is an important example in that direction. The establishment of the International Sustainability Standards Board (ISSB) by our counterpart organization, the IFRS Foundation, enhances the likelihood of a trusted and independent source developing globally accepted reporting standards as the basis of requirements.

As with financial reporting, the IAASB believes that market participants are best served when financial and other reported information benefits from external assurance, provided by professionals committed to the public interest and highest ethical standards. For this reason, in the past the IAASB has devoted significant energy to creating standards to govern assurance of non-financial information. We have a well-established umbrella standard, International Standard on Assurance Engagements (ISAE) 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information, and subject-matter specific standards such as, ISAE 3410, Assurance Engagements on Greenhouse Gas Statements. In April of this year, we published guidance aimed at helping assurance professionals apply our umbrella standard to sustainability and other non-financial (or extended external reporting) assurance engagements.

We know that our work is only the beginning, a solid foundation to build upon. This is why we committed to do more work to enhance the assurance of sustainability/ESG reporting when we approved our new 2022-2023 work plan last week.

The IAASB agreed to dedicate capacity and resources to the assurance of sustainability/ESG reporting. Information gathering and research activities, using dedicated staff resources, to determine future IAASB action will commence in January 2022. This initial work will also determine the precise scope and timing of the IAASB’s efforts. The initial work will also include a willingness to collaborate with key stakeholders throughout the world, including the standard-setting and regulatory communities.

We recognize that our initial consultations could lead to:

• Developing new subject-matter specific standard(s) that build on and supplement ISAE 3000 (Revised);
• Targeted enhancements to ISAE 3000 (Revised), as necessary; or
• Other related actions that are necessary in the public interest. For example, revising our existing guidance or developing new guidance.

Our March 2022 IAASB meeting will the first opportunity to provide feedback, share views and discuss next steps (you can listen to our discussions via YouTube).

We are conscious that demand for enhanced requirements and guidance is high; it is why we are positioning the IAASB to act in a coordinated and responsive manner.