1. Audit Evidence Bob Dohrer, Audit Evidence Working Group Chair
IAASB Meeting, New York
Agenda Item 12
September 20, 2019

2. Since the IAASB CAG met in March 2019:
Audit Evidence
Since the IAASB CAG met in March 2019:
IAASB meeting June 2019:*
Issues related to audit evidence and technology, including potential actions to address such issues (e.g. standard setting and guidance)
Although in agreement that issues are comprehensive, the Board
Did NOT support the development of project proposal
Recommended further information-gathering and research activities (IG&R)
Recommended establishing an ‘Audit Evidence Workstream Plan’ – i.e. for conducting IG&R, with the objective to provide informed recommendations to the Board on possible further actions
Encouraged clarity in differentiating between the activities of the AEWG and TWG
* An overview of the input initially considered by the AEWG was presented to the CAG in March 2019
Issues were also shared with the CAG in March 2019:
Is the objective of the standard still appropriate?
Important relationships to other standards (ISA 200, ISA 315 (Revised) and ISA 330)
How does information obtained through emerging audit techniques fit within the audit evidence model (i.e., tests of controls, substantive procedures, inspection, observation, inquiry etc.)
Is the definition of sufficient appropriate audit evidence still appropriate?
Sufficiency currently focused on quantity
Desire to incorporate concept of persuasiveness (professional skepticism)
Embedding concepts to enhance professional skepticism
Enhancing how the standard deals with contradictory evidence or obtaining evidence in an unbiased manner
What affects the determination of whether sufficient appropriate audit evidence has been obtained?
How does the nature, timing and extent of the audit procedures affect this determination?
Is the requirement addressing the relevance and reliability of information to be used as audit evidence still appropriate?
Increasing availability of information, new sources of information, changes in how information is generated
What other attributes should be considered (e.g., completeness and accuracy)?
Are the requirements addressing selection of items for testing still appropriate given new audit techniques?
Is it still appropriate that the requirements dealing with management experts are located in ISA 500?
Various areas in need of modernization – e.g.:
Definition of accounting records
Statements that are factually questionable (such as “reliability of audit evidence is increased when it is obtained from independent sources”)
More examples that recognize emerging tools and techniques

3. Audit Evidence Workstream Plan
Objective – to provide informed recommendations to the Board, by
Further understanding audit evidence issues as presented to the Board in June 2019
Exploring whether there are additional issues
Exploring stakeholder views about possible actions to address the issues
Information-gathering and research activities
Targeted outreach activities with stakeholders, including
Regulators and audit oversight bodies
Public sector
National standard setters and IFAC member bodies
Practitioners
Respondents to ITC and RFI (who commented on audit evidence issues)

4. Input by Steering Committee
Audit Evidence
Audit Evidence Workstream Plan
Information-gathering and research activities (cont.)
Academic research
Existing research that may be relevant
New research?
Other activities / sources of information, including
Post implementation review of relevant ISAs
2016 Request for input, ‘Exploring the Growing Use of Technology in the Audit, With a Focus on Data Analytics’
Feedback from respondents to the 2015 ‘Invitation to Comment, Enhancing Audit Quality: A Focus on Professional Skepticism, Quality Control and Group Audits’
Inputs received from stakeholders in response to the IAASB’s consultation on its ‘Proposed Strategy for and Work Plan for ’
Responses to the AICPA’s Proposed Statement on Auditing Standards, Audit Evidence’
IAASB?
Input by Steering Committee
Updates to Board

5. Audit Evidence
Audit Evidence Workstream Plan
Technology Workstream Plan
IG&R to pinpoint and prioritize audit evidence related issues when applying the ISAs. Main drivers:
Technology
Professional skepticism
Sources of information
Develop informed recommendations to the Board for possible further actions (e.g. standard setting or guidance)
Identify matters for which there is an opportunity for a more immediate response through developing and issuing of guidance to address the effect of technology when applying certain aspects of the ISAs.
Preliminary topics have been identified

6. Audit Evidence Feedback from the CAG:
Need for harmonious standards across various Standard Setters (e.g., ASB, PCAOB)
Concern about determining the ‘accuracy’ and ‘completeness’ of information in accordance with ISA 500 in circumstances when the auditor is dealing with large amounts of data

7. Information-gathering activities
Audit Evidence – Way Forward
Establish workstream
plan
IAASB Board
meeting
June
2019
August
2019
Update to CAG and IAASB
Sept
2019
Oct – Dec
2019
Recommendations to IAASB
March – June
2020
Information-gathering activities

8. Audit Evidence
QUESTIONS