NZAuASB Meeting 11 April 2018

Event Date 11 April

Date And Time

Location:
Level 7
50 Manners Street
Wellington

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Here is a summary of the main matters considered:

The restructured international Code

The International Ethics Standards Board for Accountants (IESBA) has released its completely rewritten International Code of Ethics for Professional Accountants (Code) that is easier to navigate, use and enforce.

Beyond the new structure, the international Code brings together key ethics advances over the past four years, and is clearer about how accountants should deal with ethics and independence issues.

The NZAuASB is responsible for developing and issuing professional and ethical standards for assurance practitioners, and considered the changes that need to be made to the new rewritten international Code as it applies to assurance practitioners in New Zealand.

The Board expects to issue an exposure draft of a revised PES-1 mid-year for public consultation.

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Independence requirements for other assurance engagements

The NZAuASB continued its discussion from its previous meeting on whether it remains appropriate to apply the stricter independence requirements in PES-1 for assurance practitioners conducting other assurance engagements, compared to the requirements in the international Code.

The Board will further deliberate the subcommittee’s recommendations at its next meeting. Any proposed changes will be included in the revised restructured PES-1 to be issued mid-year for consultation.

Submission to CA ANZ

The New Zealand Regulatory Board of Chartered Accountants Australia and New Zealand (CA ANZ) has recently issued an Exposure Draft on a proposed revision of APS-1, Statement of Agreed Upon Procedures Standards, to update the existing standard for changing professional and ethical expectations that have evolved since this standard was first issued in 1992.

The aim is to provide better support for members performing an agreed- upon procedures (AUP) engagement, and clients, regulators and others requesting one.

The Board approved its submission to the New Zealand Regulatory Board, and noted its support for the approach followed to adopt the standards issued by the International Auditing and Assurance Standards Board (IAASB), and to conform the ED with the equivalent standard issued by the Australian Auditing and Assurance Standards Board (AUASB).

The NZAuASB has been conscious for some time of the need to have a new standard for agreed-upon procedures for New Zealand, drawing on the recent work of the IAASB. However, the XRB’s mandate is confined to issuing auditing and assurance standards, including professional and ethical standards for assurance practitioners, which excludes agreed-upon procedures.

The NZAuASB is currently working to, and anticipates a change to, its mandate to allow it to issue a standard on agreed-upon procedures.

The Board therefore supports CA ANZ’s development of an updated AUP standard in the interim, to be effective until the IAASB’s current project to revise and update ISRS 4400 Engagements to Perform Agreed-Upon Procedures Regarding Financial Information (ISRS 4400), is finalised.

Guidance for auditors responding to questions at an AGM

The Board noted Guidance Statement GS 010 Responding to Questions at an Annual General Meeting issued by the AUASB, and discussed the need to develop similar guidance in New Zealand.

The Board decided not to issue guidance at this stage, but to consider the need for it after a post-implementation review of the new auditor reporting standards, in conjunction with the AUASB. This will allow the reporting of Key Audit Matters time to evolve, and for more relevant guidance to be developed.