International


 The International Public Sector Accounting Standards Board (IPSASB), an independent standard-setting board of the International Federation of Accountants (IFAC), has issued for comment the first in a series of consultation papers focused on developing an international public-sector conceptual framework. The consultation paper, Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities, identifies the IPSASB’s preliminary views on the objectives and scope of financial reporting, the qualitative characteristics of information included in general purpose financial reports, and the characteristics of public-sector reporting entities.

Comments are due by March 31. The document is available at www.ifac.org/Guidance/EXD-Details.php?EDID=0119.

 The International Auditing and Assurance Standards Board (IAASB), a standard- setting board under the auspices of IFAC, released seven International Standards on Auditing. The ISAs are in a new style following the conventions to improve clarity. The clarified ISAs include ISA 200 (Revised and Redrafted), Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with International Standards on Auditing, which contains an overview of an audit to aid in understanding its purpose and scope. The ISA also defines the respective authority of the requirements and guidance in ISAs and contains the most fundamental requirements for auditors. It emphasizes the importance of sound and consistent professional judgment by the auditor, and the necessity for sufficient audit evidence to support the auditor’s opinion.

The IAASB also released:

  • ISA 320 (Revised and Redrafted), Materiality in Planning and Performing an Audit
  • ISA 450 (Revised and Redrafted), Evaluation of Misstatements Identified during the Audit
  • ISA 530 (Redrafted), Audit Sampling
  • ISA 610 (Redrafted), Using the Work of Internal Auditors
  • ISA 705 (Revised and Redrafted), Modifications to the Opinion in the Independent Auditor’s Report
  • ISA 706 (Revised and Redrafted), Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor’s Report


The revisions in particular upgrade the standards in important areas of materiality, misstatements and reporting by the auditor, IAASB Chairman John Kellas said in a press release. The ISAs are part of the IAASB’s program to redraft existing standards following clarity drafting conventions. As of Oct. 2, the IAASB had released 22 final clarity redrafted ISAs. The IAASB is on track to finalize its complete set of clarified ISAs by the end of this year. All clarified ISAs will be effective for audits of financial statements for periods beginning on or after Dec. 15, 2009.

The ISAs are available for free at www.ifac.org/store.

 The AICPA filed a comment letter on the review of the IASC Foundation’s (IASCF) Constitution. While expressing strong support for the objectives of the IASCF and the IASB, the Institute:

  • Urged the IASCF to continue its efforts to secure permanent funding for the IASB’s activities. The Institute said the SEC should use part of the current levy on U.S. public companies for accounting standard-setting activities as a permanent funding source for the IASB.
  • Supported the creation of a monitoring group, as envisioned by the IASCF, to formalize the link to public authorities. The Institute expressed support for the SEC having a seat on the monitoring group and recommends that the IASCF add a bank regulator to the group. If in the future many countries adopt the IASB’s standard for private entities, the AICPA believes the IASCF should increase private entity constituency representation on the monitoring group.
  • Agreed with the IASCF’s recommendation that a memorandum of understanding between the monitoring group and IASCF should be exposed for public comment.
  • Supported the establishment of operating protocols in a manner that fully maintains the IASB’s independence, while providing sufficient oversight so that individual countries don’t have a basis for “carve-out” exceptions to what the IASB promulgates.
  • Supported the proposed IASB geographic composition and the increased board size as reasonable changes.
  • Supported having a maximum of three part-time members of the IASB.
  • Called for the Trustees Appointments Advisory Group (TAAG) to continue to have an important role to fill even with the creation of the monitoring group. Primarily, the TAAG will help ensure that the IASCF has a formalized mechanism to reach out to additional constituencies to gather “fresh” perspectives when identifying candidates to serve as IASCF Trustees.


The comment letter is available at www.ifrs.com/pdf/IASB_Comment_Letter.pdf.

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