In 2004, the IAASB launched a project to improve the clarity of its standards. This 'Clarity Project' was undertaken with support from regulators in order to improve the overall readability and understandability of the ISAs and make them more compatible with regulatory frameworks, including the EC's Statutory Audit Directive.
Alongside the Clarity Project, ISAs on important topics such as auditing groups, estimates (including fair values) and related party transactions were being revised and improved to reflect the latest developments and thinking.
The IAASB completed its clarity project in March 2009 and as a result there are now 36 newly updated and clarified ISAs and a clarified International Standard on Quality Control (ISQC).
The FRC supplemented additional standards and guidance where necessary to maintain the requirements and clarity of the previous UK and Irish auditing standards. The new clarified ISAs and the new UK and Irish auditing standards are effective for audits of financial statements for periods ending on or after 15 December 2010.
Clarified International Standard on Quality Control (UK and Ireland) 1, Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements (ISQC (UK and Ireland) 1) has also been published.
The improvements that have been made are designed to improve audit quality.
The new clarified ISAs (UK and Ireland) have introduced significant changes to audits and will therefore require considerable effort for their successful implementation.
Several initiatives are underway to ensure members are supported in their implementation of Clarified ISAs: