Auditing and assurance

theUNIVERSITYofGREENWICH

1October 2009

L3aAudit and assurance

J. E. Spencer-Wood

Auditing and assurance

Lecture 3aRegulatory Auditing Bodies – UK and RoI

(Hong Kong SAR, Malaysian and Singaporean institutions may study

equivalent auditing bodies of their countries)


2October 2009


J. E. Spencer-Wood

RSB’s and RQB’s in the British Isles

MAJOR RSB/RQB’s

• ACCA

• ICAEW

• ICAI

• ICAS

SMALLER RSB/RQB’s

• AAPA (RSB only)

• IIPA

• ICPAI• AIA (RQB only)

• CIPFA (RQB only)


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J. E. Spencer-Wood

• 1900 – ICAEW -‘Standard Audit Report’

• 1961 – ICAEW - U-Statements

• 1973 – ICAEW - Standards Committee formed

• 1970’s - Appearance of ‘The Expectation Gap’

• 1976 - CCAB formed the APC Body to supervise and guide auditors Mainly run by practising, unpaid auditors Issued Audit Guidelines (AG’s) Issued Audit Standards

A brief history of audit regulation


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J. E. Spencer-Wood

• 1977 - IAPC founded by IFAC

• 1991 - CCAB formed the APB More independent than APC Lay members

• 2000 - ‘New’ APB More independent than previous APB Controlled by ‘The Foundation’

• 2002 - IAPC• renamed IAASB

A brief history of audit regulation (cont.)


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J. E. Spencer-Wood

• 2003 - ‘New’ new APB ! More independent than previous APB's Controlled by The FRC

• 2005 - FRC (UK) Oversight Board established

– Professional Oversight Board for Accounting (POBA)



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J. E. Spencer-Wood

• 2005 - APB Move to International Standards of Auditing (ISA’s)

– Adoption started 15.12.04 IAS (UK and Ireland)

– Cover instances where SAS’s contain higher standards than the equivalent ISA’s

– National laws and regulations



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• 2005 - Irish Auditing and Accounting Supervisory Authority (IAASA) set up

• 2005 - Companies (Audit, Investigation and Community Enterprise) Act 2005

9th Sept 2005: POBA made responsible for recognition, supervision and de-recognition of RSB’s and RQB’s


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J. E. Spencer-Wood


• 2005 - IFAC (parent of the IAASB) Public Interest Oversight Board established (PIOB)

• 2005 - FRC POBA renamed POB

• 2006 - European Group of Auditors’ Oversight Bodies (EGAOB) set up

8th Company Law directive


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J. E. Spencer-Wood


• 2006 - Companies Act 2006 Mainly consolidation as far as accounting and audit matters

– Minor changes

– Except matters relating to SME (Advanced AAS)

• 2006 - International Forum of Independent Audit Regulators (IFIAR) set up

To aid international collaboration and audit quality


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J. E. Spencer-Wood


• 2009 - IAASB ‘Clarity project’ Started replacement of all ISA’s from 15.12.07 Standards (ISA’s) are:

– Objective-based• ‘over-arching objective’

– Clarify professional requirements• ‘shall’ indicates a mandatory action• ‘Application material’ (non-mandatory)

– Drafted in a usable structure– Drafted in clear language


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J. E. Spencer-Wood

A brief history of audit regulation (cont.)The structure of the clarified ISA’s

1. ‘IntroductionIntroductory material may include information regarding the purpose, scope, and subject matter of the ISA, in addition to the responsibilities of the auditors and others in the context in which the ISA is set

2. Objective Each ISA now contains a clear statement of the objective of the auditor in the audit area addressed by that ISA


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J. E. Spencer-Wood

A brief history of audit regulation (cont.) The structure of the clarified ISA’s

3. DefinitionsFor greater understanding of the ISA’s, applicable terms

have been defined in each ISA

4. RequirementsEach objective is supported by clearly stated

requirements. Requirements are always expressed by the

phrase “the auditor shall”


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A brief history of audit regulation (cont.) The structure of the clarified ISA’s

5. Application and other explanatory materialThe application and other explanatory material explains

more precisely what a requirement means or is intended

to cover, or includes examples of procedures that may be

appropriate under given circumstances’ – IAASB, July 2009


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J. E. Spencer-Wood


2010 – APB• Clarified and adjusted ISA standards

• Adoption in the British Isles from FS’s year-endings 30/9/10 and thereafter.


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J. E. Spencer-Wood

The Financial Reporting Council• The Auditing Practices Board (APB)

• The Accounting Standards Board (ASB)

• The Financial Reporting and review panel (FRRP)

• The Professional Oversight Board (POB)

• The Investigation and Discipline Board (IDB)

• The Board for Actuarial Standards (BAS)

Auditing Supervision in the British Isles


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• The Auditing Practices Board (APB) issues:• Auditing standards

ISA(UK and Ireland)– formally SAS’s

and other standards

• Practice Notes (PN’s)• Bulletins• Advisory matter to support standards

Auditing Supervision in the British Isles


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J. E. Spencer-Wood

• Statements of Auditing Standards • ISA(UK & Ireland)

SAS Mandatory

• Practice Notes (PN’s)• Advisory (‘PN 14’)

• Bulletins• Advisory (‘2008/6’)

APB publications


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• Other Standards• Investment circular reporting (SIR’s)• Ethical Standards (ES's)

• Discussion Papers• Leads to ED

• Exposure Drafts (ED’s)• Leads to standard

• Various other papers

APB publications (cont.)


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• The International Auditing and Assurance

Standards Board (IAASB, formally the IAPC)

• Parent organisation: IFAC

• Issues (generic) International Standards on Auditing

(ISA’s)

Auditing Supervision - International


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• Mandatory, but do not override local national standards• International Standards on Auditing (ISA’s)• International Standards on Review Engagements

(ISRE’s)• International Standards on Related Services (ISRS)• International Standards on Assurance Engagements

(ISAE)• International Standards on Quality Control (ISQC)

IAASB publications


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• Advisory • International Audit Practice Statements (IAPS’s)

• Updating and topical advice is also issued• Such as ‘IAASB eNews’

IAASB publications


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Further information

• AAPA - http://www.accaglobal.com/documents/aapa_memb_app.pdf

• ACCA - http://www.accaglobal.com/ • AIA - http://www.aiaworldwide.com/ • APB - http://www.frc.org.uk/apb/ • Chinese ICPA - http://www.cicpa.org.cn/english/ • CIPFA - http://www.cipfa.org.uk/ • CPA Singapore - http://www.accountants.org.sg/ • HKCPA - http://www.hkicpa.org.hk/ / • IAASB - http://www.ifac.org/iaasb/


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• ICAEW - http://www.icaew.com/index.cfm/route/158423/icaew_ga/en/Home/Institute_of_Chartered_Accountants_in_England_and_Wales

• ICAI - http://www.icai.ie/ • ICAS -

http://www.icas.org.uk/site/cms/contentChapterView.asp?chapter=605

• ICPAI - http://www.cpaireland.ie/ • MIA - http://www.mia.org.my/new/ • MICPA - http://www.micpa.com.my

Further information (cont.)

Documents

Auditing and assurance