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Arnold Schilder, Chairman of the IAASB, held a speech at a ceremony commemorating the official adoption of ISAs in Italy.
Schilder addressed specifically three topics. The first was: an overview of the international situation of ISA adoption/adaptation. The ISAs were thoroughly reviewed, rewritten and enhanced in the so-called Clarity Project. This was finished in 2009. The IAASB counts 104 jurisdictions that are using the Clarified ISAs already, or are committed to using them in the near future. This is well-spread all over the world: 40 jurisdictions in Europe, 17 in the Americas, 21 in Asia and Oceania, and 26 in Africa/Middle East. Russia was the latest addition in December 2014.
Adoption of the clarified ISAs is also greatly supported by all 27 international networks of firms, united in the Forum of Firms. They are committed to applying the ISAs in their firm-wide methodologies. So adoption takes place along two axes: the national adoption, and the firms’ adoption. Finally, I note the great support from many regulators like IOSCO, IFIAR, the Basel Committee on Banking Supervision, and international organizations as the World Bank, IMF, OECD, UNCTAD and INTOSAI. Many of them are represented in IAASB´s Consultative Advisory Group (CAG) that advises us twice a year with a fair level of detail.
The second topic was the endorsement of ISAs in Europe. The European Commission is an official observer with active speaking rights in our Board meetings and has fully participated in the discussions on the Clarified ISAs. The Commission is also represented in the CAG, the PIOB and the so-called Monitoring Group that oversees the PIOB. So the Commission is a well-respected voice in our process.
In the revised European Audit Directive and the new Audit Regulation of 2014 the Commission is empowered to adopt the ISAs. Article 26.3 of the Directive specifies certain criteria for that adoption; e.g., that the ISAs have been developed with proper due process, public oversight and transparency, and that they are conducive to the EU public good.
Finally, Schilder was asked what is on the IAASB´s table now. The IAASB has entered a new phase. The IAASB has finalized a number of key projects: the Clarified ISAs, a completely new auditor reporting model, the revision of a number of other standards such as on review and compilation engagements, as well as new standards such as on the assurance to Greenhouse Gas statements. And now the IAASB has started work on various newer topics. To name some: quality control; group audits; financial institutions; integrated reporting. And soon data analytics; risk assessment; and professional scepticism.