The International Auditing and Assurance Standards Board (IAASB) issued two exposure drafts; one that addresses concerns about the use and reliability of external confirmations as audit evidence and one that proposes stricter requirements when an auditor uses an expert to obtain audit evidence.
Proposed International Standard on Auditing (ISA) 505 (Revised and Redrafted), External Confirmations, is directed at the effective performance of external confirmation procedures when the auditor determines that such procedures are an appropriate response to an assessed risk of material misstatement.
Proposed ISA 620 (Revised and Redrafted), Using the Work of an Auditor’s Expert, deals with the auditor’s use of the work of a person or organization possessing expertise in a field other than accounting or auditing, employed or engaged by the auditor to assist the auditor to obtain sufficient appropriate audit evidence. It places particular emphasis on the need for the auditor to evaluate the expert’s objectivity and to establish a proper understanding with the expert of the expert’s responsibilities for the purposes of the audit.
The IAASB is one of the standard-setting bodies of the International Federation of Accountants. Comments on the EDs are due by Feb. 15. They are available at www.ifac.org/eds.
The International Federation of Accountants (IFAC) Professional Accountants in Business (PAIB) Committee published interviews with 10 leading PAIBs on their experiences and views on internal control in a paper titled, Internal Control From a Risk-Based Perspective. This paper is part of a larger PAIB Committee project on internal control. In 2006, the committee published an overview, Internal Controls–A Review of Current Developments, which reviewed current developments and some of the latest thinking in the area of internal control. These two publications form the groundwork for the development of principles-based good practice guidance on internal control, which the PAIB Committee plans to issue in 2008. To download the paper for free, visit www.ifac.org/Store/Details.tmpl?SID=1187290337488793