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Status: Several related projects in progress.
Objective of this Project
Scope
Background
Board Discussions to Date
Further Information Objective of this Project The objective of this project is to revise standards and guidance dealing with the standard report of an auditor who has been engaged to express an opinion on general purpose financial statements prepared in accordance with generally accepted accounting principles. The project will also provide guidance on an auditor's report on special purpose financial statements. Scope Phase I
The AASB proposed to revise Section 5400, The Auditor's Standard Report, to adopt the new standard audit report wording contained in International Standard on Auditing 700, The Independent Auditor's Report on a Complete Set of General Purpose Financial Statements (ISA 700).
- Phase II
- The AASB will address the remaining issues in and propose to adopt ISA 700, along with International Standards on Auditing 705, Modifications to the Opinion in the Independent Auditor’s Report, 800, Special Considerations – Audits of Special Purpose Financial Statements and Specific Elements, Accounts or Items of a Financial Statement and 805, Special Considerations When Reporting on Summary Financial Statements: The project also proposes revisions to other Handbook Sections, such as:
- Sections 5090, Audit of Financial Statements — an Introduction, and 5095, Reasonable Assurance and Audit Risk, regarding the objectives and principles governing an audit;
- Section 5110,Terms of the Engagement, regarding terms of the engagement;
- Section 5405, Date of the Auditor's Report, regarding the date of the auditor’s report; and
- Section 6550, Subsequent Events, regarding subsequent events.
Further, the project proposes revisions to examples of audit reports throughout the Handbook. Background - The IAASB issued revised International Standard on Auditing 700, The Independent Auditor's Report on a Complete Set of General Purpose Financial Statements (ISA 700), in December 2004. The expanded and updated wording of the auditor’s report is intended to enhance readers’ understanding of the auditor’s role and the auditor’s report. It includes:
- better explanations of the respective responsibilities of management and the auditor;
- an updated description of the audit process to reflect the new audit risk standards; and
- clarification of the scope of the auditor’s responsibilities with respect to internal control.
The IAASB has a project in progress to issue new International Standards on Auditing 705, Modifications to the Opinion in the Independent Auditor’s Report (ISA 705), and 800, Special Considerations – Audits of Special Purpose Financial Statements and Specific Elements, Accounts or Items of a Financial Statement (ISA 800). These ISAs will provide guidance on the form of auditor’s report when financial statements are prepared for special purposes or when the auditor is reporting on summarized financial statements. These projects have been delayed because of the IAASB’s Clarity project, which will revise the structure and terminology of all the ISAs. Board Discussions to Date In March 2006, the AASB revised the project proposal to split the project into two phases. In September 2005, the AASB approved the project proposal. Further Information
Staff support: Eric Turner, CA
Phone no.: +1 (416) 204-3240 |
