NZAuASB Meeting 5 December 2019

  • Auditing
  • Review
  • Professional & Ethical
  • Other Assurance
Event Date 05 December

Date And Time

Level 7
50 Manners Street

This event has already taken place.

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Here is a summary of the main matters considered at the public session:

ISA (NZ) 315 (Revised)

The Board considered and approved ISA (NZ) 315 (Revised)[1] subject to staff comparing it with the final IAASB standard approved by the Public Interest Oversight Board.

The NZAuASB identified one compelling reason change to be carried forward from extant ISA 315. To remain consistent with changes previously made in New Zealand to ISA (NZ) 580[2] the NZAuASB included a reference to management and where relevant those charged with governance when obtaining written representations.

The journey to adoption of this standard has been a long one. Those who reviewed and commented on the international exposure draft will note a substantially re-written finally adopted standard.

The IAASB responded positively to the many submissions which expressed concern about the length and complexity of the standard as exposed.

While not significantly different in substance (and hence not re-exposed internationally, although several IAASB members voted for re-exposure), the final version is in the NZAuASB’s view a great improvement on the ED and it is particularly helpful to have the requirements condensed to a manageable size.

Although the application material remains lengthy, much of the material originally in the ED has been moved to appendices which will improve the navigability of the standard.

The Board will consider the conforming and consequential amendments as a result of ISA (NZ) 315 (Revised) at its February 2020 meeting.

Conforming Amendments to the NZAuASB’s auditing and assurance standards

The Board considered and approved NZAuASB ED 2019-3 which amends domestic standards and New Zealand specific paragraphs in the auditing and assurance standards to align it with the revised Professional and Ethical Standard 1, International Code of Ethics for Assurance Practitioners (including International Independence Standards) (New Zealand).

The Board also approved, subject to editorial requests and comments received from stakeholders, the draft submission to the IAASB on its Exposure Draft: Proposed Amendments to the IAASB’s International Standards, Conforming Amendments to the IAASB’s International Standards as a Result of the Revised IESBA Code

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Proposed Changes to Interim Review Reports

A subcommittee meeting consisting of members from the NZAuASB and the Australian Auditing and Assurance Standards Board (AUASB) was held in early November to discuss the best way forward to ensure the respective standards are harmonised in respect of the description of the auditor’s responsibilities related to going concern. This was the subject of varied feedback to the exposure drafts on both sides of the Tasman. The joint sub committee members and staff are continuing to work together to find a harmonised approach.

At the December meeting the Board discussed the constituency feedback on other questions raised by the NZAuASB ED 2019-1 Amendments to New Zealand Standard on Review Engagements, and agreed:

  • To add a requirement for the auditor to make enquiries about suspected or actual non-compliance with laws and regulations;
  • Not to mandate the reporting of an ‘other information’ section in the interim review report;
  • Not to add further information in NZ SRE 2410[3] on going concern or “adequate disclosures” given the limited scope of the project;
  • To take no further action on matters identified to be outside this limited scope project.

The Board will continue its discussion on NZ SRE 2410 at its February meeting.

Non-Assurance Services and Fees

The Board received an update on the IESBA’s non-assurance services and fees projects and had a preliminary discussion on the draft proposals.

  • The objective of the IESBA’s non-assurance services (NAS) project is to ensure that all the NAS provisions in the IESBA Code are robust and of high quality for global application, thereby increase confidence in the independence of audit firms.  
  • The objective of the IESBA’s Fees project is to review the provisions in the IESBA Code pertaining to fee-related matters. The project is responsive to a public interest need for the IESBA to deal with those matters, including those that impact or are perceived to impact auditor independence.

The IESBA has subsequently approved the two exposure drafts at its December meeting, which we expect to be issued in January. The Board will continue its discussion on the proposals at its February meeting and is planning to have robust discussions with the community on the proposals. Details about the planned outreach will be communicated early next year.

[1] ISA (NZ) 315 (Revised), Identifying and Assessing the Risks of Material Misstatement

[2] ISA (NZ) 580, Written Representations

[3] NZ SRE 2410, Review of Financial Statements Performed by the Independent Auditor of the Entity