A demanding world - audit and assurance at a crossroads

Some challenging discussions were held about new assurance standards for non-financial information in Auckland recently. Chair of the International Auditing and Assurance Standards Board (IAASB), Tom Seidenstein, spoke to a diverse audience about the IAASB’s work to support audit quality and on sustainability assurance. 

Two roundtable discussions were organised by the External Reporting Board (XRB) for practitioners, regulators and interested parties to engage directly with Seidenstein. He was clear about the challenges the profession faces, such as increased regulatory and legislative scrutiny, heightened expectations including for sustainability reporting, and the need to remain relevant in a rapidly accelerating environment.  

“Audit and assurance are at a crossroads.  Trust and the public interest must remain core tenets of the audit and assurance professions. The long-term viability of the profession depends on the ability to address today’s challenges in an ethical and professional manner,” Seidenstein said. 

The IAASB is revising the Going Concern standard to improve disclosure. It’s also providing clarity on the auditor’s responsibilities’ regarding fraud to reduce the “expectation gap” inherent in the role. 

In response to the challenges, Seidenstein used the afternoon session to outline the IAASB’s work to establish globally accepted standards for assurance on sustainability reporting. The IAASB has conducted an unprecedented international engagement campaign to deliver a new standard (ISA 5000) by the end of this calendar year. This is in part to provide those in European jurisdictions certainty by 2026 in line with the European Commission’s timetable. 

Seidenstein told the audience the IAASB’s focus was on global acceptance of the standards. 

“We want to get it right from the beginning. It’s not easy to put Humpty Dumpty back together again,” he said. 

The IAASB is working with the International Ethics Standards Board for Accountants (IESBA) and other leading standards setters to finalise the standard. Roundtable attendees raised issues such as the difference between entities’ and practitioner’s views of materiality, incorporation with other standards and the nature of “reasonable assurance.”   

The XRB are currently consulting on the following IAASB proposals: 

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