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Non-Assurance Services

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Presentation on theme: "Non-Assurance Services"— Presentation transcript:

1 Non-Assurance Services
Gary Hannaford IESBA July 2014 New York

2 Non-Assurance Services
Background At the April 2014 IESBA meeting the Board approved for exposure proposed enhancements to the following subsections of Section 290 of the Code (along with corresponding changes to Section 291): Management Responsibilities; Preparing Accounting Records and Financial Statements; and Taxation Services The Task Force met in May 2014 to further develop the position paper contemplated in the project proposal. Specifically, the Task Force: Considered the type of publication the NAS position paper will be; and Developed a first draft of the paper

3 Project Purpose & Safeguards
Non-Assurance Services Project Purpose & Safeguards Project purpose and progress – Stage I: To examine three areas of NAS (management responsibilities, the phrase “routine or mechanical” and the emergency exception provisions) – ED draft released; and Stage II: Develop a position paper on NAS to be used as a communication vehicle – in drafting phase Safeguards Noted in the strategy work plan Impact on NAS For Board discussion – should safeguards be addressed before NAS position paper is released? NAS paper would benefit from the examination of safeguards before it is written by addressing an issue of stakeholder concern; Examination of safeguards pertaining to NAS could provide the basis for edits

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Publication Type In considering the type of publication, the Task Force took into account the different types of publications (other than standards) issued by the standard setting boards supported by IFAC and by the staff A chart detailing the types of publications can be seen in Agenda Item 7-C

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Publication Type The Task Force agreed that the paper: Should be issued by the Board due to the nature of the material; Should be used as a communication vehicle to explain key principles and the position of the Board; Will not be authoritative – it will not go through due process of a standard; Should not be exposed for public comment, however it should generate dialogue with the Board’s stakeholders; Should be written for all stakeholders; Most likely would not need updating in the future based on the material; and Should be located on the IESBA website and not in the handbook.

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Publication Type Based on these conclusions, the Task Force agreed that the paper should be a policy position paper under the category of “Board Publication,” as: It will be Board-approved, yet not authoritative; and The paper has been drafted to explain the position of the Board concerning the standard-setting process and the conceptual framework using the NAS standards as the example.

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Draft Paper Outline for the paper was presented to the Board at the September 2013 meeting Task Force agreed that the paper should: Be concise based on Board feedback (no more than five pages); Be efficient and effective in explaining the Board’s position; and Have an overarching message conveying the Board’s robust process for setting global standards and the conceptual framework while using NAS as the vehicle to demonstrate the details of the message

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Draft Paper Structure of the paper: Introduction – states the purpose of the paper Independence Establishes importance of independence linking the term to the fundamental principles and serving the public interest; Links independence via an unbiased evaluation of audit evidence to quality of audit; and Displays to reader the importance to which the Board considers independence.

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Draft Paper Structure of the paper (continued): Mandate and operation of the Board – Assists reader in understanding the various factors , processes that contribute to the creation of global standards Conceptual framework and NAS provisions Clearly states that if threats are not at an acceptable level, the professional accountant is obligated to terminate the engagement; and Global applicability of the approach.

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Draft Paper Structure of paper (continued): NAS Addressed in the Code – describes how NAS are addressed using the threats and safeguards approach while considering the type of entity and materiality The Task Force agreed to use bookkeeping services over internal audit, taxation or valuation services as the example in this section of the paper because the bookkeeping provisions in the Code contain various considerations as to how the Code addresses NAS including: Differences for PIEs and non-PIEs Prohibitions Mandatory safeguards; and Materiality The NAS paper is designed to be a communication vehicle and bookkeeping services are commonly encountered

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Draft Paper Structure of paper (continued) Evolving Code – The paper concludes with a section noting the various projects in the Strategy Work Plan

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Key Dates Key dates: An analysis of comment letters concerning the Exposure Draft: October 2014 Final Board approval of NAS position paper: January 2015

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Questions?

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