One year and a half after our call for action to the IAASB, we were delighted to respond to the IAASB Discussion Paper on audit of LCEs.
What priorities do we propose for the IAASB?
Our response highlights the following 3 priorities for the IAASB:
Next steps
Some EU Member States’ experiences in applying a separate national LCE standard could serve as a starting point for the IAASB to develop its standard. Accountancy Europe can act as a platform where the IAASB and our members from relevant countries can exchange and collaborate on this issue.
The second enforcement questionnaire brought the following findings:
In comparison to the first CEAOB questionnaire, which addressed year 2016, there was notable increase in the number of administrative measures and sanctions in year 2017. However, these two surveys are not directly comparable due to different methodology used. Moreover, during the first CEAOB questionnaire, many Member States were still at the early stage of their Audit Reform implementing processes.
There seem to be significant differences in national competent authorities’ (NCAs) approach when imposing administrative measures and sanctions on auditors and audit firms. The numbers of these measures do not seem to compare with the size of the population of auditors nor any other generally known indicator. This CEAOB survey report does not explain the rationale and criteria behind the administrative measures and sanctions, but the report is merely descriptive.
It is important to note that many Members States have yet to start imposing administrative measures and sanctions in line with the EU Audit Reform legislation. Read more
This report concludes that the multidisciplinary model is one of the best mechanisms to develop the skills, expertise and consistency needed for quality audits.
It was co-authored by the Chartered Accountants Australia and New Zealand (CA ANZ), the Association of Chartered Certified Accountants (ACCA) and the International Federation of Accountants (IFAC). A review of existing research and other related literature reveals evidence that multidisciplinary firms fill a valuable market need. It also highlights the fact that the recently evolved rules mitigate risks associated with audit firms providing non-audit services to some audit clients.
On 1 October, the Committee for the future of the accountancy sector (CTA), which has been looking into the audit market in the Netherlands with the ultimate aim to improve audit quality, published its preliminary report. It discusses mainly these 6 themes:
Report with final findings is expected to be published in December 2019. Read more (available in Dutch only)
At the ICAEW Audit Conference on 4 October, Sir Donald spoke publicly for the first time since starting his review on the quality and effectiveness of audit. While accepting that audit performance must improve, he mentioned that the current heavy criticism and blaming of auditors troubles him. Read more
The revised standard (ISA UK 570) follows concerns about the quality and rigour of audit and increases the work auditors are required to do when assessing whether an entity is a going concern. It means UK auditors will follow significantly stronger requirements than those required by the current ISAs. Read more
The main change proposed is the introduction of a white list of permitted services that auditors of PIEs can provide. These are the services which are closely related to audit and/or required by law and regulation.
This means that the current list of prohibited non-audit services that auditors of PIEs can provide to audited entities would be removed.
The consultation period closed on 27 September. Read moreThis curated content was brought to you by Júlia Bodnárová, Accountancy Europe Senior Advisor since 2017. You can send her tips by email and connect with her on LinkedIn.
