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Back to the drawing board for proposed auditing standard

The IFAC proposal for an auditing standard on reviews of interim financial information should not be adopted in its current form and represents an attempt to find a 'quick fix' solution to meeting a self-imposed 2005 deadline for International Standards on Auditing (ISAs), says ACCA.

ACCA expresses its views in its response to the International Auditing and Assurance Standards Board (IAASB) exposure draft of an ISA Review of Interim Financial Information Performed by the Auditor of the Entity.

ACCA cautions against attempts to find 'quick fix' solutions in advance of 2005 – the date by which the EU aims to have ISAs adopted by all member states. ACCA also states that it would be a fundamental error for IAASB to progress the exposure draft to a standard as it ignores the new assurance framework (International Framework for Assurance Engagements) and leaves an existing standard – ISA 910 Engagements to Review Financial Statements – in dire need of change.

David York, ACCA Head of Auditing Practice, said: ” IAASB has to recognise that rushing out a new ISA aimed solely at interim financial statements and restricted to auditors is a wasted effort. It should instead, in the interests of efficiency, make the proposed standard applicable to both annual and interim historical financial information and extend it to other professional accountants, not solely auditors.

“Given the inter-related nature of the many auditing standards, whatever IAASB decides – and ACCA believes this could include a rethink of the boundaries between ISAs and International Standards on Assurance Engagements (ISAEs) – all standards which will be affected by the proposed changes should be issued for comment, not just one.”

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