NZAuASB Update 6/2020

COVID-19 information, NZAuASB April Meeting, New NZAuASB ED, IAASB pronouncements...

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.

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Applies to:

AuditingProfessional & EthicalReviewOther Assurance

XRB website features Financial Reporting and Auditing Resources on COVID-19

COVID-19 is an unprecedented global pandemic that is currently impacting the operations of many reporting entities across all sectors in New Zealand. Preparers, auditors and those charged with governance will need to consider the current impact and emerging risks arising from the COVID-19 pandemic in the financial statements of the organisations they are involved with.

On our new XRB webpage we have provided a range of useful financial reporting and auditing resources to assist preparers and auditors during this period of significant disruption to business as usual and increased uncertainty of the impact and response to COVID-19.

As new materials and guidance become available, we will update our COVID-19 webpage, so we encourage you to revisit our page regularly.

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NZAuASB Chair, Robert Buchanan appointed to the Public Interest Oversight Board

Robert Buchanan

Our congratulations to Robert on his appointment to the Public Interest Oversight Board (PIOB).  The PIOB is the global, independent oversight body that seeks to improve the quality and public interest focus of the international audit and assurance and ethics standards developed by the IAASB and the IESBA. 

The PIOB is currently composed of nine distinguished individuals, originating from nine countries on five continents, representing a broad spectrum of professional and regulatory backgrounds.

NZAuASB April Meeting

NZAuASB icon Applies to:

AuditingProfessional & EthicalReviewOther Assurance

Highlights of the April NZAuASB meeting included:

  • Consideration of the IESBA’s non-assurance services and fees exposure drafts;
  • Approval of revisions to NZ SRE 2410 subject to approval by the AUASB;
  • Approval of an invitation to comment and exposure draft to incorporate Part 2 of the IESBA Code in PES 1; and
  • An update from IAASB member, Lyn Provost

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Amendments to PES 1

 ED NZAuASB 2020-1 cover Applies to:

Professional & Ethical

The NZAuASB has published for public comment an Exposure Draft, ED NZAuASB 2020-1 Proposed Amendments to PES 1: Part 2, Assurance Practitioners Performing Professional Activities Pursuant to their Relationship with the Firm.

ED NZAuASB 2020-1 amends PES 1 to incorporate Part 2 of the IESBA Code.

It is possible is for assurance practitioners to find themselves in ethically problematic circumstances that do not involve clients and hence face the same issues and ethical dilemmas as professional accountants in business.

Examples of such circumstances include, potential conflicts an assurance practitioner may face when performing work for an employing organisation, facing undue pressure from within the firm, or facing pressure from within the firm to offer inducements.

Circumstances such as these are currently addressed in PES 1 by reference to other ethical requirements. NZ R300.5 requires, “where an individual who is an assurance practitioner is performing assurance services pursuant to the assurance practitioner’s relationship with the firm, whether as a contractor, employee or owner, the individual shall comply with any other ethical provisions that apply to these circumstances. “

The NZAuASB believes incorporating Part 2 into PES 1 will be beneficial to all assurance practitioners by providing all ethical requirements in one place.  

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Update on IAASB Pronouncements Issued

 IAASB logo  Applies to:

AuditingProfessional & Ethical

IAASB Releases Conforming Amendments

The IAASB has released conforming amendments that align its international standards more closely with the revised IESBA Code, this ensuring that they can continue to be applied together with the IESBA Code.

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The conforming amendments to the IAASB’s international standards become effective on 15 July 2020.

The NZAuASB expects to finalise amendments to its standards to align more closely with PES 1 at its June meeting.

IAASB Publishes its New Strategy and Work Plan

The International Auditing and Assurance Standards Board (IAASB) published its Strategy for 2020‒2023 (the Strategy) and Work Plan for 2020‒2021 (the Work Plan).

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The strategy sets three strategic objectives to focus IAASB priorities and resources during 2020‒2023:

  1. Increase the emphasis on emerging issues to ensure that the IAASB International Standards provide a foundation for high-quality audit, assurance and related services engagements
  2. Innovate the IAASB’s ways of working to strengthen and broaden its agility, capabilities, and capacity to do the right work at the right time
  3. Maintain and deepen relationships with stakeholders to achieve globally relevant, progressive and operable standards

While the IAASB approved its strategy before the pandemic, its three strategic objectives remain relevant. The IAASB has used these strategic objectives to help prioritise its crisis response. For example, the IAASB has developed, and is continuing to develop, guidance on audit considerations in response to the pandemic. The IAASB is enhancing its interactions with national audit standard-setters, regulators, and independent audit oversight regimes.

At the same time, the IAASB recognises that its Work Plan and timelines may need to adapt as new priorities emerge, the pandemic and associated restrictions impact its ability to work, and stakeholder capacity for change becomes constrained.

In the coming weeks and months, the IAASB will consider potential impacts and consult, as appropriate, with the PIOB, the IAASB Consultative Advisory Group, and other stakeholders.

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Have your say

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

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

You can submit your comments directly from the Exposure Draft page on our website following the links below.

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.