ICAEW supports APB decision to adopt clarified ISAs

The Auditing Practices Board (APB) today announced its intention to update UK and Irish auditing standards for the new, clarified International Standards on Auditing (ISAs).

Commenting on the announcement, Gerry Murphy, chairman of the ICAEW's Audit and Assurance Faculty, said:

"Responses to APB's consultation show there is clear support for their proposals on the adoption of clarified ISAs. We will be working to help ensure that auditors implement clarified ISAs robustly but in a manner which is proportionate to the size and complexity of the entities they are auditing, focussing on meeting the objectives of standards rather than merely ticking boxes.

The ICAEW's response to APB's proposals urged APB and others to take an active part in helping smaller firms improve audit quality in implementing clarified ISAs. We warned that failure to do so would create resistance to effective regulation which would be particularly unfortunate in the current economic climate.

We therefore welcome the APB's commitment to implementation support which is already evident in the work of its SME group. The APB's efforts to assist SME auditors and its acknowledgement of the importance of direct involvement with the profession and training providers are critical. The all-important implementation process must minimise unnecessary costs, particularly in the area of audit documentation, especially for smaller firms, and maximise audit efficiency, effectiveness and overall audit quality."

Gerry Murphy continued:

"The ICAEW's ISA Implementation group will be putting in place a full programme of awareness raising activities among practitioners as it did when the UK first adopted ISAs in 2005. We look forward to helping ensure that this major overhaul of auditing standards results in clearer audit methodologies and better quality audits.

The APB's decision to adopt these standards for periods ending on or after 15 December 2010, rather than for periods commencing on or after 15 December 2009 is welcome as it avoids the problems arising from the adoption of the standards 'early' for short accounting periods."