1 1 International Auditing and Assurance Standards Board IAASB Strategic Review Alta Prinsloo, Deputy Director, IAASB Steering Committee INTOSAI Professional Standards Committee April 23-24, 2007

2 Survey (January / February)Survey (January / February) Review of reports of audit oversight and other bodiesReview of reports of audit oversight and other bodies Discussions with identified groups, including INTOSAI PSC Steering Committee and IAASB CAGDiscussions with identified groups, including INTOSAI PSC Steering Committee and IAASB CAG Invited forumsInvited forums –April 13, Sydney –June 28, Brussels Presentations at IAASB meetingsPresentations at IAASB meetings Exposure draft – OctoberExposure draft – October Consultation Plan Strategy Review

3 138 responses138 responses Many responses from organizations, rather than individualsMany responses from organizations, rather than individuals Responses Survey

4 IFAC Member Body29% Standards Setter18% Professional Accountant in Public Practice 18% Member or TA of IFAC Board or Committee14% Academia11% IAASB CAG Member Organization/Representative11% Public Sector11% IAASB Member10% User of Financial Statement 8% Small and Medium Sized Practice 8% Respondents Survey

5 Preparer of Financial Statements 8% Private Sector 8% Regulator 6% Developing / Emerging Economy 6% Governmental or Legislative Body 6% IAASB Technical Advisor 5% Audit Oversight Body 3% Small and Medium Sized Entity 2% Donor Agency or Similar Body 1% Other 1% Respondents Survey

6 Most Affected Groups (Weighted) Survey

7 Others include:Others include: –Academia (educational institutions, educators, students, researchers) –Public sector (government, tax authorities, politicians) –Legislators and courts Affected Groups - Other Survey

8 1.Credibility of financial reporting and the worldwide accountancy profession 2.Convergence with international standards 3.Application of standards by SMPs 4.Regulation of the worldwide accountancy profession 5.The expectations gap 6.New needs of information users 7.Corporate credibility 8.The audit performance gap Environmental Factors (Weighted) Survey

9 99% of respondents indicated that the following should remain the IAASB’s top initiatives:99% of respondents indicated that the following should remain the IAASB’s top initiatives: –Development of standards –Global acceptance, convergence and partnership –Communications No significant new initiatives were identifiedNo significant new initiatives were identified Initiatives Survey

10 1.Assist with the implementation of ISAs 2.Develop standards for other assurance engagements 3.Complete current projects / consider matters relating to recently completed ISAs 4.Redraft standards other than ISAs in clarity style 5.Revise ISAs that were redrafted, but not revised 6.Develop a conceptual framework 7.Develop the meaning of “reasonable assurance” 8.Consider qualitative characteristics or behavioral aspects of an auditor 9.On-line business reporting / XBRL Development of Standards – Recommendations Survey

11 Do you agree with the recommendations on the previous slide?Do you agree with the recommendations on the previous slide? Do you agree with the order of importance?Do you agree with the order of importance? Matters for Consideration Survey

12 Assist with implementation of the ISAsAssist with implementation of the ISAs –Establish a period in which no new ISAs will become effective –ISA implementation guidance SMEs and emerging economiesSMEs and emerging economies Industry specific guidanceIndustry specific guidance –Post-implementation review of clarity redrafted ISAs ISAs – Recommendations Survey

13 Respondents supported establishing a period in which no new ISAs become effective. Do you agree? How long should this period be?Respondents supported establishing a period in which no new ISAs become effective. Do you agree? How long should this period be? Is there scope for releasing new standards in blocks – say, every 3 years?Is there scope for releasing new standards in blocks – say, every 3 years? How should issues relating to the implementation of ISAs in the public sector be identified?How should issues relating to the implementation of ISAs in the public sector be identified? Matters for Consideration Survey

14 Revise ISAs redrafted but not revised as part of Clarity projectRevise ISAs redrafted but not revised as part of Clarity project –ISA 250 –ISA 720 ISAs – Recommendations Survey

15 How should the recommended revisions of ISAs 250 and 720 be prioritized?How should the recommended revisions of ISAs 250 and 720 be prioritized? From a public sector perspective, are there any other redrafted but not revised ISAs that should be revised? How should their revisions be prioritized?From a public sector perspective, are there any other redrafted but not revised ISAs that should be revised? How should their revisions be prioritized? Matters for Consideration Survey

16 Develop standards for other assurance engagementsDevelop standards for other assurance engagements –Reporting on internal control and risk management –Reporting on sustainability reports –Auditor’s involvement in prospectuses, including prospective and pro forma financial information and comfort letters Redraft ISREs, ISAEs and ISRSs in clarity styleRedraft ISREs, ISAEs and ISRSs in clarity style Address conceptual issues (i.e., framework, reasonable assurance)Address conceptual issues (i.e., framework, reasonable assurance) Other Standards – Recommendations Survey

17 Is the list of recommended standards for assurance engagements complete?Is the list of recommended standards for assurance engagements complete? How should the recommended projects be prioritized?How should the recommended projects be prioritized? How should a project to develop a conceptual framework be prioritized?How should a project to develop a conceptual framework be prioritized? What aspects relating to the qualitative characteristics or behavior of an auditor should be considered?What aspects relating to the qualitative characteristics or behavior of an auditor should be considered? Matters for Consideration Survey

18 Continue to identify and address impediments to convergenceContinue to identify and address impediments to convergence Continue dialogue with those affected by the IAASB’s activitiesContinue dialogue with those affected by the IAASB’s activities –SMEs / SMPs and emerging economies –National standard setters –INTOSAI –International regulators and audit oversight bodies –Jurisdictions that have not yet indicated intention to adopt the ISAs Global Acceptance – Recommendations Survey

19 Drive implementation by utilizingDrive implementation by utilizing –Regional organizations –IFAC member bodies –National standard setters –Forum of Firms FacilitateFacilitate –Translations –Training –Exchange of experiences Global Acceptance – Recommendations Survey

20 The responses supported continuing to put weight on this activity, but it was not clear what should be done in addition to what is already in place. Is there anything further that the IAASB should consider?The responses supported continuing to put weight on this activity, but it was not clear what should be done in addition to what is already in place. Is there anything further that the IAASB should consider? Matter for Consideration Survey

21 Increase and target communicationIncrease and target communication Develop communication strategyDevelop communication strategy Develop project updates, summaries of key points and implications of new/revised standardsDevelop project updates, summaries of key points and implications of new/revised standards Create an awareness amongst investors and the wider public as to what an audit isCreate an awareness amongst investors and the wider public as to what an audit is Communication – Recommendations Survey

22 Who should be the IAASB’s principal targets for communication, and what should be communicated?Who should be the IAASB’s principal targets for communication, and what should be communicated? Matter for Consideration Survey

23 International Federation of Accountants