Sanchia Temkin
8 January 2007
Johannesburg — THE International Auditing and Assurance Standards Board has approved a new set of audit proposals aimed at bolstering the quality and appropriateness of audit reports.
Board chairman John Kellas (pictured) said the proposals were intended to shore up written presentations sought by auditors from managers. He said the proposals also dealt with concerns about whether auditors relied too heavily on management presentations at the expense of other evidence.
As part of its comprehensive programme to enhance the clarity of international standards, the board had issued several exposure drafts of proposed international standards on auditing.
Kellas said the proposed international standards on auditing accounting estimates (ISA 540) reinforced best practice and caused auditors to give appropriate attention to areas of accounting judgment, such as assumptions and possible bias. "The other proposed redrafted standards contain clear requirements and easy-to-understand application guidance," he said.
The exposure drafts formed part of the international auditing board's 18-month programme to redraft existing standards and to develop new and revised standards. An exposure draft on independence requirements contained in the code of ethics for professional accountants was issued by the board.
The last substantive revisions to the code were made in November 2001, Kellas said. The changing environment in the past few years had led the board to consider what revisions to auditor independence requirements were needed.
Proposed modifications to the code include the expanding of partner rotation requirements and updating requirements relating to the provision of non-assurance services, including setting out additional guidance on the provision of tax services to audit clients.
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