IAASB plans tweaks to auditing standards

The International Auditing and Assurance Standards Board is planning to make some minor adjustments in its quality management and global audit standards to align them more closely with international ethics rules for accountants.

On Monday, the IAASB began a consultation process on a set of proposed narrow scope amendments to arrive at better convergence with the International Ethics Standards Board for Accountants' International Code of Ethics for Professional Accountants (Including Independence Standards). The proposed revisions have two main goals: They would align definitions and requirements in the IAASB standards with new definitions for publicly traded and public interest entities in the IESBA Code of Ethics. In addition, the amendments would extend the applicability of the various existing requirements for listed entities to meet amplified expectations from constituents about audits of public companies.

Some of the main proposed revisions involve extending the scope of the entities included under the International Standards on Quality Management and the International Standards on Auditing so they would be subject to engagement quality reviews. The IAASB also hopes to offer more transparency in the auditor's report about particular aspects of the audit, including auditor independence, communicating key audit matters, and the engagement partner's name. The proposed changes aim to help those charged with governance of companies, such as members of the board of directors, fulfill their responsibility overseeing the financial reporting process, such as communicating about quality management and auditor independence.

The IAASB is asking for feedback from stakeholders on the exposure draft through a digital response template by April 8, 2024.