SOCPA Comments on IAASB's Exposure Draft of the Proposed International Standard on Auditing 570 Amendments
The International Auditing and Assurance Standards Board (IAASB) has published the Exposure Draft of the Proposed International Standard on Auditing 570 Amendments and amendments to other international auditing standards. The Board aims to facilitate effective responses to the material risk of deviations related to the going concern issue and to support the auditor’s evaluation of management’s assessment of the entity’s ability to continue as a going concern by emphasizing the importance of practicing professional skepticism throughout the audit process. In addition, developing transparency regarding the auditor’s responsibilities and work with regard to whether management's use of the going concern basis in preparing the financial statements was appropriate, including developing communication and reporting.
SOCPA, represented by its Auditing Standards Board, is supportive of the IAASB’s initiative to improve the auditing standards to protect the public interest, especially in light of the recent business failures around the world, and the significant impact of this issue on the auditor’s responsibilities and his role in providing the expected level of service. SOCPA expressed its support for the standard exposure draft in terms of clarifying the key terms in the standard, enhancing the interconnection of the standard with other auditing standards, and developing transparency in the auditor’s report by explicitly indicating the features of his responsibilities and work with regard to the issue of evaluating management’s assessment of the entities ability to continue, and to assess the appropriateness of an entity’s management use of going concern basis in preparing the financial statement under audit.
At the same time, SOCPA shared its comment on a couple of issues within the standard exposure draft, which includes enhancing the clarity of the standard and supporting the auditor's role and his commitment to the requirements of the standard to keep the expectations gap within the proper range.
SOCPA's detailed comment can be viewed by clicking here.