1. Chartered Accountants Audit Conference Susan Fraser, CA Senior Project Manager © AUASB 2008

2. International Auditing and Assurance Standards Board (IAASB) © AUASB 2008 2

3. IAASB Why interested?  Australian Government & CLERP 9  ASIC Act 2001  Financial Reporting Council (FRC) © AUASB 2008 3

4. IFAC (International Federation of Accountants) Composition Established – 30 years ISAs - worldwide SMPs/SMEs © AUASB 2008 4

5. IAASB Direction 2009 - 2011 Overall Objectives Initiatives Proposed Strategy  Areas of focus © AUASB 2008 5

6. IAASB Areas of Focus 2009 - 2011 Performance Standards Sustainability Standard New Technologies IAPS Other Matters © AUASB 2008 6

7. Contact AUASB / IAASB The Future © AUASB 2008 7

8. Questions? © AUASB 2008 8

9. AUASB Strategic Direction and Work Plan © AUASB 2008 9

10. Strategic Direction What is our strategic direction, as outlined by the FRC in 2005?  Public interest  Principles based audit  Risk based audit approach © AUASB 2008 10

11. Strategic Direction How do we achieve this?  Auditing Standards [ASA]  Assurance Standards [ASAE, ASRE]  Guidance Statements [GS]  Participate in local & international standard setting activities © AUASB 2008 11

12. Strategic Direction How does it compare with the overall IAASB strategy?  Complementary © AUASB 2008 12

13. AUASB Work Plan Main Project = ASA Redrafting [ISA Clarity]  October 2007 announcement  Application period  Expected release date  “ISA Plus” policy © AUASB 2008 13

14. ASA Redrafting – Approach Use the clarified ISA as the base ASA Change for 3 main reasons:  Legal and/or regulatory requirements  Legislative instruments  “Clear public interest”  Editorial and format changes © AUASB 2008 14

15. ASA Redrafting & You What does this mean for you?  Yes, more change  Benefits:  Alignment to International Standards [best practice]  Consistent application [world-wide]  Clarity of Obligation Settling in period [ISA] © AUASB 2008 15

16. ASA Redrafting - Points to note Timetable is dependent on IAASB schedule “Redrafted” v “Revised and Redrafted” © AUASB 2008 16

17. Work Plan Other Projects for 2008-2009  Review of current Pronouncements  “Public interest” areas  Australian Regulatory changes  International standard-setting activities © AUASB 2008 17

18. Questions? © AUASB 2008 18

19. The legally enforceable Auditing Standards one year on……….. © AUASB 2008 19

20. Background “Force of Law” introduced 1 July 2006  CLERP 9 reform  Codification of existing standards (AUSs)  No fundamental change to audit Requirements © AUASB 2008 20

21. Findings Increased awareness of standards Still a way to go Documentation © AUASB 2008 21

22. Some Issues for the Audit Profession Documentation Training SME – differing opinions © AUASB 2008 22

23. Issues - Documentation Documentation - too little/too much/not relevant “If it hasn’t been documented, it hasn’t been done” Documentation - the key to supporting the audit opinion Know what you are required to document © AUASB 2008 23

24. Issues - Training Audit is a specialised skill area Staff & Management training critical Your business success depends on how you train & invest in your people © AUASB 2008 24

25. Issues - SMEs Differing Opinions SMEs:  Size, complexity & application of accounting and auditing standards  Appropriateness of required audit procedures & documentation levels  An “Audit is an audit” principle © AUASB 2008 25

26. Input welcome at AUASB AUASB technical team  Background in audit Accessible to all Input and Feedback welcome © AUASB 2008 26

27. Questions? © AUASB 2008 27

28. Conducts of Audits....The Future © AUASB 2008 28

29. Our Thoughts – The Future Trends Some key Drivers  Business Environment  Litigation  Risk  Regulation © AUASB 2008 29

30. Drivers - Business Environment Developments  Business Structures  Operations  Funds  Technology  SME space © AUASB 2008 30

31. Drivers - Litigation Expectation Gap  Responsibilities  Assurance  Independence © AUASB 2008 31

32. Drivers - Risk Business changes Audit Approach Decisions – balancing risk © AUASB 2008 32

33. Drivers - Regulation Increased regulation  Legitimacy Minimum Standards © AUASB 2008 33

34. The Future - Summary Messages © AUASB 2008 34

35. Conducts of Audit……The Future Focus Challenges © AUASB 2008 35

36. Conducts of Audit……The Future Challenges  The Audit Practice  Training  Recruit & Retain  Communications  Overload  Lobbying © AUASB 2008 36

37. Conducts of Audit……The Future Messages © AUASB 2008 37

38. Questions? © AUASB 2008 38