IAASB proposes changes for reporting on summary financial statements

The International Auditing and Assurance Standards Board (IAASB) has released an Exposure Draft proposing changes to International Standard on Auditing (ISATM) 810, Engagements to Report on Summary Financial Statements. ISA 810 deals with the auditor’s responsibilities relating to an engagement to report on summary financial statements derived from financial statements audited in accordance with ISAs by that same auditor. The IAASB is proposing limited conforming amendments to ISA 810 as a result of the issuance of its new and revised Auditor Reporting standards, which address auditor reporting on general purpose financial statements.

“In light of its overall efforts to enhance auditor reporting, the IAASB believes it is also in the public interest to provide users of summary financial statements with greater transparency in circumstances when additional information, such as key audit matters, are communicated in the related auditor’s report on the audited financial statements,” explained IAASB Chairman Prof. Arnold Schilder. “The proposed changes to ISA 810 represent a balanced approach considering the objective of an engagement to report on summary financial statements and the report that is required to be issued.”

“The board’s approach also recognises that the manner in which summary financial statements are prepared and presented may vary on a national basis depending on the criteria used, and therefore national auditing standard setters may further tailor ISA 810 in their jurisdictions,” noted IAASB Technical Director Kathleen Healy. “The board is therefore particularly interested in hearing from stakeholders in those jurisdictions where ISA 810 reports are frequently issued to understand whether its proposed changes will be capable of being implemented and would be expected to benefit users of these reports.”  

The IAASB has issued its proposals with a 90-day comment period in order to finalise them on a timely basis and align the effective date of ISA 810 (Revised) with the effective date of the new and Revised Auditor Reporting Standards (i.e., for audits of financial statements for periods ending on or after 15 December 2016).

The IAASB invites all stakeholders to respond to this Exposure Draft, which includes specific questions for respondents on key aspects of the proposals and highlights areas of focus for various stakeholders in responding to the Exposure Draft. To access the Exposure Draft and submit a comment, visit the IAASB’s website at www.iaasb.org. Comments on the Exposure Draft are requested by 2 November 2015.

The IAASB develops auditing and assurance standards and guidance for use by all professional accountants under a shared standard-setting process involving the Public Interest Oversight Board, which oversees the activities of the IAASB, and the IAASB Consultative Advisory Group, which provides public interest input into the development of the standards and guidance. The structures and processes that support the operations of the IAASB are facilitated by the International Federation of Accountants (IFAC).

IFAC is the global organisation for the accountancy profession, dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. It is comprised of more than 175 members and associates in 130 countries and jurisdictions, representing approximately 2.8 million accountants in public practice, education, government service, industry, and commerce.