NZAuASB Update 2/2019

This NZAuASB Update provides you with an overview of the New Zealand Auditing and Assurance Standards Board’s recent activities, any new standards or FAQs, as well as other matters of interest.

NZAuASB February Meeting

 


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The NZAuASB met on 13 February and discussed a range of topics affecting the professional and ethical standards, auditing standards, and other assurance engagement standards.

Highlights included:

  • Approval of New Zealand Auditing Standard (NZ AS) 1, The Audit of Service Performance Information. Effective for audits of service performance information included in the general purpose financial report for periods beginning on or after 1 January 2021.  NZ AS 1 is available now on the XRB website.

Have a look

  • Approval of an exposure draft of New Zealand Standard on Review Engagements (NZ SRE) 2410, Review of Financial Statements Performed by the Independent Auditor of the Entity, subject to Australian Auditing and Assurance Standards Board’s (AUASB) approval of an exposure draft of the equivalent Australian Standard.;
  • Considering the recommendation from a working group, consisting of nominated Board members and staff, on a possible approach for an alternative engagement (other than an audit or review) for small not-for-profit entities;
  • Initial consideration of the IAASB’s exposure drafts on quality management standards.
  • A briefing on the Treasury’s Living Standards Framework and meeting with the Auditor-General.

You can access the public agenda, meeting papers and the meeting highlights on the XRB website. 

Have a look


Wondering how to audit service performance information?

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The NZAuASB has just approved a new standard, New Zealand Auditing Standard (NZ AS) 1 The Audit of Service Performance Information.

You will need to apply NZ AS 1 if you’re engaged to audit general purpose financial statements that include SPI from 2021.  This start date aligns it with the effective date of PBE FRS 48 Service Performance Reporting.  Early adoption is permitted—especially if you have already been engaged to audit SPI.

Read our blog post


Significant changes proposed on Quality Management 

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We reported on this in our last issue.

Briefly, the International Auditing and Assurance Standards Board (IAASB) seeks public comment by 1 July 2019 on three interrelated standards that address quality management.

These proposals bring important changes to the way professional accountancy firms are expected to manage quality—for audits, reviews, and other assurance and related services engagements.

The new approach is intended to improve the scalability of the standards because it promotes a system tailored to the nature and circumstances of the firm and its engagements.

The proposed changes are significant and will require firms to adjust how they manage quality, both for the firm and the engagement teams. The revisions will likely require increased effort for most firms. They could also affect firms’ organisational structures and operations. The revisions will also require greater leadership by engagement partners in managing and achieving quality engagements.

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Outreach planned in New Zealand

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A key question we (and the IAASB) want to explore, is the scalability of the proposed standards.

In addition to roundtables and a webinar, the NZAuASB is planning half-day workshops to assist small and medium practices in working through the proposed new approach to quality management, and to obtain feedback to inform its submission to the IAASB about any foreseeable implementation difficulties.

More details about our planned outreach activities will be provided soon.

You can either respond directly to the IAASB on the Exposure Drafts, or you can share your views with the NZAuASB, in writing or by attending one of our planned outreach events. Responses to the NZAuASB are required by 7 June 2019.

The NZAuASB will consider all feedback when submitting its response to the IAASB.


IAASB Future Strategy & Work Plan Consultation 

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We reported on this last time too.

The evolving environment in which the International Auditing and Assurance Standards Board (IAASB) operates demands a strategy that reflects, among others, changing technology; a dynamic small- and medium-sized entity landscape; and emerging reporting needs.

In its Proposed Strategy for 2020–2023 and Work Plan for 2020–2021, the IAASB puts forth a way forward that it believes meets stakeholders’ evolving needs, and is in the public interest.

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 Our new submissions process

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We have recently transformed the way you can provide feedback on documents we put out for consultation.

You can now submit your documents or comments using the consultation page on the XRB website.

We have designed a secure online form to make your upload safe, quick and easy. The upload form will now appear with every consultation document open for comment.  

For example, if you wanted to make a submission or provide some informal comments on, say NZASB ED 2018-5 PBE IPSAS 41 Financial Instruments, you can now do this directly using the XRB website – instead of attaching it to an email or posting it to us.

We encourage you to use the new online submission process.

You can:

  • Upload an MS Word document (and a PDF file, if you wish); or
  • Write your comments directly in the comments field provided.

Have a look 


Have your say...

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Before issuing a finalised standard the NZAuASB and the international standard-setting boards, the IAASB and the IESBA, issue consultation documents. These documents seek your feedback on proposals that could potentially affect you.

We are currently consulting on the matters set out in the tables below. 

Tell us how these changes could affect the audits you perform.

We welcome your comments and feedback, either formal or informal, by the due dates below.

Please use our new submissions process (see above). You can now submit directly from the Exposure Draft page on our website.

 

IAASB EDs and Consultation Papers


This NZAuASB Update is intended to provide subscribers with a summary of the recent activities of the New Zealand Auditing and Assurance Standards Board (NZAuASB). Links to websites are correct at the time of publication. Subscribers should not rely on this newsletter as a definitive publication of updates. The External Reporting Board and its sub-Board the NZAuASB do not guarantee, and accept no legal liability whatsoever arising from or connected to, the accuracy, reliability, currency, timeliness or completeness of this newsletter. The information contained in this newsletter does not constitute advice and should not be relied upon as such.