IFAC Issues Standard on Assurance Engagements

The International Federation of Accountants (IFAC) released in July its first international standard on assurance engagements. Developed by IFAC’s international auditing practices committee, its objective is to help accountants worldwide provide assurance on an increasing range of information, including data, systems and processes and behavior. Wherever specific standards do not exist for assurance engagements, practitioners should follow the new guidance.

Robert Roussey, who chaired the committee for five years, says that benchmark standards are vital to ensuring accountants approach assurance engagements with the same level of objectivity as for other more traditional engagements. The committee expects to use this standard as a framework to develop guidance in other areas.

The standard as issued provides guidance only on a high level of assurance (which, traditionally has referred to the financial statement audit). Jim Sylph, a technical director at IFAC, says that internationally “assurance” refers to what in the United States is called attestation. Sylph says the committee plans to conduct further research into “moderate” assurance (such as a review of prospective financial information), how it affects the work effort of accountants and how it should be communicated in their reports.

The standard is effective for reports dated on or after December 31, 2001, and early application is encouraged. More details are available at www.ifac.org.