Professional Documents
Culture Documents
Page 1
The Changing Audit Environment
professional skepticism
Increased complexity in financial reporting and
global business activity has increased users need
for more information
Page 2
Overview
Audit efficiency
Tips
Resources
Page 3
Framework for Audit Quality
Key Elements
.
Inputs
Process
Outputs
Interactions
Contextual Factors
Page 4
Framework for Audit Quality - Objectives
Page 5
Framework for Audit Quality Acknowledging SMEs
Inputs
- Auditor viewed as a valued business and tax advisor
- SMPs have very direct influence on governance arrangements,
consultation, and monitoring activities
- Can you have relatively straightforward quality control policies and
procedures
- External consultation, technical support and using independent
staff in quality monitoring processes may be challenging for SMPs
- A culture of consultation may need to involve external technical
resources (e.g., professional accountancy organizations, other
firms, or suitably resourced third-party organizations)
- SMPs with only a small number of audit clients may have
difficulties retaining staff with relevant audit knowledge and
experience
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Framework for Audit Quality Acknowledging SMEs
Outputs
- Strong and frequent communications with senior management due
to close involvement in the entitys business and lengthy
relationships
- Enhanced opportunity to provide meaningful advice to clients
Contextual Factors
- Business practices and information systems, and applicable
financial reporting framework, are sometimes les complex
- Little distinction between management and those charged with
governance (e.g., an owner-manager will usually fulfil both roles)
- Audit committees are rare and, when they exist, members are
often not independent or financial literate
- Reporting deadlines can be less onerous
Page 7
Framework for Audit Quality Next Steps
Page 8
Overview
Audit efficiency
Tips
Resources
Page 9
Understanding the ISAs Overall Structure
Preface
Scope and Authority
Glossary
Terms applicable to the standards
ISQC1
QC for firms
ISAs
37 in all, 570+ requirements (incl. ISQC1)
Page 10
Structure of the ISAs
Page 11
Proportional Application ISQC 1
Page 12
Proportional Application ISA 200
Page 13
Proportional Application ISA 210
Page 14
Proportional Application ISA 210 (cont)
Page 15
Proportional Application ISA 315
Page 16
Proportional Application ISA 315 (cont)
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Documentation ISA 230
Page 19
Purposes of Audit Documentation
Page 20
Additional purposes (ISA 230 para 3)
Page 21
Sufficient audit documentation
Page 22
Documentation Regulators Observations I
Page 23
Documentation Regulators Observations II
Page 24
Documentation Real Problem
Page 25
Overview
Audit efficiency
Tips
Resources
Page 26
Projects nearing completion
Jurisdictions Using Clarified ISAs Already, or Committed to Using Them in the Near Future
(103)
Asia and Oceania (21): Australia, Bangladesh, China, Hong Kong, India, Indonesia, Japan,
Kazakhstan, Kyrgyz Republic, Malaysia, Mongolia, Nepal, New Zealand, Pakistan, Philippines,
Singapore, South Korea, Sri Lanka, Thailand, Uzbekistan (listed entities), Vietnam
Americas (17): Argentina, Bahamas, Barbados, Brazil, Canada, Cayman Islands, Chile, Costa
Rica, El Salvador, Guyana, Jamaica, Mexico, Panama, Puerto Rico (private companies), Trinidad
and Tobago, Uruguay, USA (private companies)
Europe (39): Albania, Armenia, Austria, Belgium, Bosnia and Herzegovina, Bulgaria, Croatia,
Cyprus, Czech Republic, Denmark, Estonia, Finland, France (Experts Comptables), FYR
Macedonia, Georgia, Greece, Hungary, Iceland, Ireland, Italy, Kosovo, Latvia, Lithuania,
Luxembourg, Malta, Moldova, Montenegro, Netherlands, Norway, Romania, Serbia, Slovakia,
Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine, United Kingdom
Africa/Middle East (26): Benin, Botswana, Ghana, Jordan, Kenya, Kuwait, Lebanon, Lesotho,
Malawi, Mali, Mauritius, Namibia, Nigeria, Palestine, Rwanda, Senegal, Sierra Leone, South
Africa, Swaziland, Tanzania, Togo, Tunisia, Uganda, United Arab Emirates (Abu Dhabi and
Dubai), Zambia, Zimbabwe
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Overview
Audit efficiency
Tips
Resources
Page 31
Tips for Audit Efficiency
Page 32
Knowledge Sharing Implementation
Page 33
Knowledge Sharing Implementation (cont)
QC Guide
Helps SMPs apply ISQC 1
proportionately and
efficiently. Includes
guidance, case study, two
sample QC manuals and
checklists
Reference, training,
customize manuals and
checklists
Page 34
IFAC Global Knowledge Gateway
Page 35
References IAASB
Staff Q&A, Applying ISAs Proportionately with the Size and Complexity
of an Entity:
http://www.ifac.org/publications-resources/staff-questions-answers-applyi
ng-isas-proportionately-size-and-complexity-ent
Staff Q&A, Applying ISQC 1 Proportionately with the Nature and Size of
a Firm:
http://www.ifac.org/sites/default/files/publications/files/Staff%20QA%
20ISQC%201%20Proportionality_FINAL.pdf
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References Knowledge Sharing - Implementation
Boosting the Quality and Efficiency of Smaller Entity Audits article: https://
www.ifac.org/news-events/2013-07/boosting-quality-and-efficiency-smaller-entity-
audits
Tips for Cost-Effective ISA Application article: https://
www.ifac.org/publications-resources/tips-cost-effective-isa-application
Tips for Cost-Effective ISQC 1 Application article: https://
www.ifac.org/publications-resources/tips-cost-effective-isqc-1-application Page 37
Thank You
www.ifac.org/smp
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