The revised ISA deals with the auditor’s responsibilities in an audit of financial statements relating to going concern and the implications for the auditor’s report. ISA 570 (Revised) is effective for audits of financial statements for periods ending on or after December 15, 2016.

Revisions to this ISA are as a result of new ISA 701, Communicating Key Audit Matters in the Independent Auditor’s Report. ISA 706 (Revised) deals with the auditor’s responsibility to communicate with those charged with governance in an audit of financial statements. ISA 706 (Revised) is effective for audits of financial statements for periods ending on or after December 15, 2016.

This ISA has been revised to conform to the enhanced auditor reporting requirements in ISA 700 (Revised), Forming an Opinion and Reporting on Financial Statements. Changes to this ISA relate primarily to how the form and content of the auditor’s report is affected when the auditor expresses a modified opinion. ISA 705 (Revised) is effective for audits of financial statements for periods ending on or after December 15, 2016.

New ISA 701 deals with the auditor’s responsibility to communicate key audit matters (KAM) in the auditor’s report. The ISA applies to audits of complete sets of general purpose financial statements of listed entities. It also applies when the auditor is required by law or regulation to communicate KAM for other entities or when the auditor decides to communicate KAM on a voluntary basis. ISA 701 is effective for audits of financial statements for periods ending on or after December 15, 2016.

This revised ISA deals with the auditor’s responsibility to form an opinion on the financial statements as well as the form and content of the auditor’s report issued as a result of an audit of financial statements. This ISA applies to an audit of a complete set of general purpose financial statements. ISA 700 (Revised) is effective for audits of financial statements for periods ending on or after December 15, 2016.

The International Auditing and Assurance Standards Board^® (IAASB^®) today released its new and revised Auditor Reporting Standards, designed to significantly enhance auditor’s reports for investors and other users of financial statements.

"These changes will reinvigorate the audit, as auditors substantively change their behavior and how they communicate about their work," explained Prof. Arnold Schilder, IAASB Chairman. “Informed by extensive research and global outreach to investors, regulators, audit oversight bodies, national standard setters, auditors, preparers of financial statements, audit committee members, and others, the final International Standards on Auditing (ISAs) represent a momentous—and unprecedented—first step. Now, we must study, promote, and plan for the effective implementation of the new and revised standards.”

"The IAASB has responded to calls from investors and others that it is in the public interest for an auditor to provide greater transparency about the audit that was performed," added Dan Montgomery, former IAASB Deputy Chair and Chair of the Auditor Reporting project. "Increasing the communicative value of the auditor’s report is critical to the perceived value of the financial statement audit."

The most notable enhancement is the new requirement for auditors of listed entities’ financial statements to communicate "Key Audit Matters"—those matters that the auditor views as most significant, with an explanation of how they were addressed in the audit. The IAASB has also taken steps to increase the auditor’s focus on going concern matters, including disclosures in the financial statements, and add more transparency in the auditor’s report about the auditor’s work. Information about the enhancements to auditor reporting and the ISAs that are affected can be found in the Auditor Reporting Fact Sheet.

"The introduction of Key Audit Matters for listed entities is a significant enhancement that will change not only the auditor's report, but more broadly the quality of financial reporting—and therefore the informative value to investors and other key stakeholders," said Linda de Beer, IAASB Consultative Advisory Group (CAG) Chair.  "The IAASB CAG, with its diverse membership base, has unanimously supported and encouraged the IAASB’s formidable leadership in effecting these changes."

The new and revised Auditor Reporting standards will be effective for audits of financial statements for periods ending on or after December 15, 2016. "While culminating an intense effort over the past six years, the release of the final standards is by no means the end of the IAASB’s work on the topic of auditor reporting," noted Kathleen Healy, IAASB Technical Director. "It is essential that the board and staff continue to promote awareness of these standards and facilitate their effective implementation."

To this end, the auditor reporting section of the IAASB’s website has been redesigned and updated, debuting the first components of an "Auditor Reporting Toolkit." Additional resources will be subsequently released, so users should visit the website frequently to stay abreast of the latest guidance and resource materials. The IAASB also plans to undertake a post-implementation review, which will be critical in assessing whether the standards are achieving their intended effects and whether further changes to auditor reporting are needed in the public interest.

About the IAASB
The IAASB 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).

About IFAC^®
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. IFAC is comprised of over 175 members and associates in 130 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

The new and revised Auditor Reporting standards are responsive to calls from investors and other users of audited financial statements for more informative and relevant auditor’s reports based on the audit that was performed. This new and revised Auditor Reporting standards include new ISA 701, Communicating Key Audit Matters in the Independent Auditor’s Report, and a number of revised ISAs, including ISA 700 (Revised), Forming an Opinion and Reporting on Financial Statements, and ISA 570 (Revised), Going Concern.

The International Accounting Bulletin (IAB) recently presented its 2014 Lifetime Achievement Award to Prof. Arnold Schilder, chairman of the International Auditing and Assurance Standards Board^® (IAASB^®).

Prof. Schilder was honored for his contributions to the accountancy profession, which include serving as president of the Dutch professional body NIVRA (1995-1996), as a member of the Managing Board of the Dutch Central Bank (1998-2008), as chair of the Basel Committee on Banking Supervision's Accounting Task Force (1999-2006), and as a member of the Public Interest Oversight Board (2005-2008).

In the narrative that accompanies the award, the IAB also recognized Prof. Schilder for his leadership of the IAASB since assuming its chairmanship in 2009.

"He has played a key role in guiding the IAASB as it strives to enhance the quality and consistency of practice throughout the world," the narrative reads. "Ninety jurisdictions around the world already use or are in the process of adopting or incorporating IAASB's International Standards on Auditing^™."

IFAC Deputy Director Kelly Anerud moderated and served as a panelist in a session entitled "Translating International Standards and Guidance: Best Practices and Tools to Achieve Quality Translations" on November 12, 2014, at the World Congress of Accountants 2014, in Rome, Italy.

The session also included presentations by Mariarita Cafulli, head of the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabli Translation Department, Javier Quintana, secretary of the Ibero-American Cooperation Framework (IberAm Project) and CEO of the Instituto de Censores Jurados de Cuentas de España, and Hilde Blomme, deputy CEO of the Federation of European Accountants (FEE).