Date posted: 27/07/2020

Submission to the IAASB on assurance over extended external reporting (phase 2)

CA ANZ and ACCA jointly submitted comment to the IAASB on its second round proposed guidance for assurance engagements over emerging forms of external reporting

We lodged another joint submission with ACCA on 13 July 2020 to the International Auditing and Assurance Standards Board (IAASB) regarding its second public consultation on proposed guidance on assurance engagements over emerging forms of external reporting (EER). This public consultation of the IAASB follows a “phase 1” consultation in 2019 on the same envisaged guidance. Phase 1 contained some content of the guidance the IAASB is proposing, while this second phase included the full proposed content.

The IAASB’s two-phased consultation on its proposed guidance followed a consultation in 2017 on ten key challenges that arise in the performance of assurance engagements over EER. That consultation resulted in the IAASB proposing the guidance – making this our third submission on the IAASB project over the last few years. 

In both our 2019 and 2020 submissions on proposed guidance (phases 1 and 2), we supported the idea that the guidance needs to be practical and should not conflict with ISAE 3000 (Revised). We highlighted that framework neutrality needs to be taken into account, as ISAE 3000 may be applied to a wide range of engagements with different criteria, pertaining both qualitative and quantitative information, and across many jurisdictions. 

The IAASB has responded positively to some key points in our previous (2019, phase 1) submission, for example, by replacing the new concept of ‘materiality process’ which, as we had pointed out in our previous submission, had a different meaning to ‘materiality’ in ISAE 3000. Likewise, we drew attention to the differences between limited and reasonable assurance, and remarked that although the guidance is developing in the right direction, it appears to be lengthy.

EER reports can include non-financial information that extends beyond the traditional focus on financial position, financial performance and impact on an entity’s financial resources, eg integrated reporting, sustainability reporting and reports on environmental, social and governance matters. Assurance on EER is either mandated by legislation or regulation or voluntarily.

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