IAASB Proposes Limited Changes in Audit Standards for New Ethics Rules

The International Auditing and Assurance Standards Board released an exposure draft proposing amendments to its International Standards on Auditing in response to recent proposals from International Ethics Standards Board for Accountants on how to respond to noncompliance with laws and regulations.

The proposed amendments to the IAASB’s International Standards—Responding to Non-Compliance or Suspected Non-Compliance with Laws and Regulations, come in the wake of the IESBA’s re-exposure draft, Responding to Non-Compliance with Laws and Regulations. Both the IAASB and the IESBA operate under the auspices of the International Federation of Accountants.

“The IESBA’s exposure draft proposes a framework for professional accountants in deciding how best to act in the public interest when they come across an act or suspected act of non-compliance with laws and regulations, which will be highly relevant for auditors,” said IAASB chairman Arnold Schilder in a statement. “The IAASB therefore believes that amendments are needed to the IAASB’s International Standards in the public interest to enable them to operate in concert with the IESBA standards and without confusion due to the many jurisdictions that utilize both.” 

The exposure draft focuses on proposed amendments to International Standard on Auditing 250, Consideration of Laws and Regulations in an Audit of Financial Statements, with less extensive changes proposed to seven other standards. The amendments are limited in nature and mostly acknowledge the enhancements that will be made by the IESBA in the Ethic Code to clarify how aspects of the IESBA’s proposals will be reflected in the IAASB’s international standards.

The exposure draft is open for comment through Oct. 21, 2015. “The IAASB has issued its proposals with a 90-day comment period in hopes that stakeholders will consider them alongside the IESBA’s re-exposure draft,” said IAASB technical director Kathleen Healy. “The IAASB intends to continue to coordinate with the IESBA as both boards move forward on this important topic.”