1.  Implementing Clarity ISAs - an audit firm perspective CCAB Training Providers Event, 17 November 2008 Jon Rowden

2. PricewaterhouseCoopers LLP 17 November 2008 PwC involvement in APB Regulatory Impact Assessment CCAB Training Providers event Slide 2

3. PricewaterhouseCoopers LLP 17 November 2008 Slide 3 CCAB Training Providers Event UK Regulatory Impact Assessment - Key features 11 firms contributed (6 large, 5 small) 13 large (>500 hours) audits and 14 small audits covered in the study PwC assessed 3 large audits Interest from PwC network firms - assessment extended to other territories

4. PricewaterhouseCoopers LLP 17 November 2008 Slide 4 CCAB Training Providers Event Regulatory Impact Assessment – Our approach and measurement Focus on: -additional engagement hours and work effort from key changes to ISA requirements -central implementation costs Limitations: -current ISAs unclear leaving latitude for different interpretation -comparison of real gap or technical gap? -some Clarity ISAs not yet finalised at time of RIA -how will the inspectors address Clarity ISAs? Overall the RIA provides a reasonable current best estimate of the cost of implementing Clarity ISAs

5. PricewaterhouseCoopers LLP 17 November 2008 Slide 5 CCAB Training Providers Event What did PwC learn? Changes to audit standards will affect audit hours/costs differently depending on: -size of the client -type of client (e.g., group audits/stand-alone entities) -current audit approach -engagement team interpretation of the requirement Clients will need to understand required changes in: -management responsibilities -information requested by auditors -cost increases for same visible product Requirements and application guidance may be subject to significant variation in interpretation Identified areas for particular attention during training

6. PricewaterhouseCoopers LLP 17 November 2008 Discussions points for audit software or training providers and their clients Slide 6 CCAB Training Providers Event

7. PricewaterhouseCoopers LLP 17 November 2008 Slide 7 CCAB Training Providers Event Discussion point #1: Training Gap-based or refresher training? Optimal timing / practicable timing Medium and hours

8. PricewaterhouseCoopers LLP 17 November 2008 Slide 8 CCAB Training Providers Event Discussion point #2: Audit Programmes Augmented or re-written programmes Authority and consequences of ISA objectives and requirements The treatment of application guidance

9. PricewaterhouseCoopers LLP 17 November 2008 Slide 9 CCAB Training Providers Event Discussion point #4: Other facets of clarity ISA Audit manual: prompt for a re-formatting? Defining “quality” and hence “quality control” post-clarity Updating templates: chore or opportunity?

10. PricewaterhouseCoopers LLP 17 November 2008 Slide 10 CCAB Training Providers Event Discussion point #4: Managing change Ingredients for success Bumps in the road Business as usual

11. PricewaterhouseCoopers LLP 17 November 2008 Slide 11 CCAB Training Providers Event Questions for training /software providers Are there other major implementation issues? Who needs to do what to best support the implementation process for smaller firms? What are the next steps that you should be taking?

12. PricewaterhouseCoopers LLP 17 November 2008 © 2005 PricewaterhouseCoopers. All rights reserved. “PricewaterhouseCoopers” refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity. *connectedthinking is a trademark of PricewaterhouseCoopers LLP (US).  Questions?