IAASB proposes changes in audit evidence standard

The International Auditing and Assurance Standards Board is looking for feedback on a set of proposed changes to its fundamental standard for audit evidence.

The current version of International Standard on Auditing 500, Audit Evidence, deals with an auditor's responsibility to design and perform audit procedures to obtain sufficient appropriate evidence to draw reasonable conclusions on which to base the auditor's opinion.

The proposed changes would clarify ISA 500's purpose and scope and explain its relationship with other standards; provide a principles-based approach to considering and making judgments about information intended to be used as audit evidence and evaluating whether enough appropriate audit evidence has been obtained; modernize ISA 500 to be adaptable to the current business and audit environment, while considering scalability for different circumstances, including the entity and the auditor's use of technology, such as automated tools and techniques; and stress the role of professional skepticism when making judgments about information intended to be used as audit evidence and evaluating the audit evidence received.

The proposal offers a "reference framework" for auditors when making judgments about audit evidence throughout the audit. It comes as the Public Company Accounting Oversight Board is also preparing to overhaul many of its older auditing standards used in the U.S. to deal with changes in auditing technology and investor expectations of auditing firms.

"The audit and the environment in which an auditor conducts the audit and evaluates audit evidence has evolved significantly in recent years," said IAASB chair Tom Seidenstein in a statement Monday. "For example, the changing nature and sources of information used by the auditor and the increasing role played by technology demanded a reexamination of the audit standard. These proposed changes will ensure that the standard keeps pace, while retaining a principles-based approach to standard setting."

The IAASB, which is affiliated with the International Federation of Accountants, is asking for comments on the exposure draft by April 24, 2023.

Courtesy of IFAC