In the past year, the number of countries using or committed to using the Clarity International Standards on Auditing (ISAs) has grown from about 30 to more than 70, according to Arnold Schilder, chairman of the International Auditing and Assurance Standards Board (IAASB).
Speaking at the CReCER 2011 financial reporting conference in Buenos Aires on June 30, Schilder said “there is a tremendous amount of support globally” for the use of Clarity ISAs, a consistent set of auditing standards for use internationally.
Countries using Clarity ISAs or committed to using them include the United States (private companies), the United Kingdom, Canada, Japan, India, Brazil and China.
“In the private sector, the audit methodologies of the top 22 global auditing networks, not just the Big Four, are based on the Clarity ISAs,” Schilder said. “In the public sector, the International Standards of Supreme Audit Institutions (ISSAIs) include the Clarity ISAs along with supplemental guidance for public-sector auditors. So it is fair to say that there is one global auditing language now, both for the private and the public sector.”
ISAs are principles-based and emphasize the use of professional judgment in the examination of audit evidence, Schilder said. “The Clarity ISAs are intended to stimulate a ‘thinking audit’ and thereby enable auditors, and the standards themselves, to be capable of effectively adapting to future auditing challenges.”
To achieve the full benefits of the Clarity ISAs, more emphasis needs to be placed on training and support, Schilder said. This is especially important for small and medium-size practices (SMPs) and others that audit small and medium-size entities.
“SMPs need practical support, through guidance and tools, to help overcome perceived barriers to effective and efficient implementation,” Schilder said, adding that the IAASB has posted a number of free educational publications and videos on its Clarity Center website.
Over the past seven years, the AICPA Auditing Standards Board (ASB) has aligned its agenda with the IAASB in the Clarity Project, with a goal to converge U.S. generally accepted auditing standards (GAAS) and ISAs by December 2012.
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