IFAC offers guide to small business audits

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The International Federation of Accountants has updated its guide to using International Standards on Auditing in audits of small and midsized entities.

IFAC released the fourth edition of its Guide to Using ISAs in the Audits of SMEs, Fourth Edition. The updates in the latest edition reflect recent changes to the International Standards on Auditing, including International Auditing and Assurance Standards Board projects on auditor reporting, disclosures, the auditor’s responsibilities relating to other information, and using the work of internal auditors.

Volume 1 of the guide discusses the basic concepts of a risk-based audit in conformance with the ISAs. Volume 2 includes practical guidance on performing SME audits, including two case studies—one of an SME audit and one of a micro-entity audit.

Since it was first published in 2007, the guide has been downloaded more than 100,000 times, and 22 translations have either been completed or are in progress. IFAC members can ask for a Microsoft Word version of the guide with tracked changes to help them generate new translations. IFAC has also updated the Companion Manual that provides practical “best use” suggestions for the guide.

Separately, IFAC’s International Auditing and Assurance Standards Board is looking for comments on an exposure draft of a revised International Standard on Auditing.

ISA 315 (Revised), Identifying and Assessing the Risks of Material Misstatement, has been updated to deal with new technologies such as data analytics, which a growing number of auditors are now using to perform audit procedures. The revisions aim to improve the standard’s applicability to entities across a wide array of circumstances and complexities, and encourage auditors to exercise more professional skepticism throughout the risk identification and assessment process.

The IAASB is seeking public comments on the exposure draft by Nov. 2, 2018.

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