The following diagram is a simplified view of the standard-setting process.
Each box contains a link to more information.
International organisation identifies a technical issue
A technical issue may be identified by the International Auditing and Assurance Standards Board (IAASB).
Since April 2006, the AUASB has released Australian Auditing Standards (ASAs) based on the ISAs issued by the IAASB, in line with strategic direction from the Financial Reporting Council. Therefore, issues on the IAASB work program are also included on the AUASB work program, although the degree of involvement by the AUASB varies issue-by-issue and may be substantive or non-substantive.
AUASB identifies a technical issue
AUASB Board members and staff identify technical issues requiring consideration.
Issues identified may be referred to the IAASB.
Australian organisation/individual identifies a technical issue
Australian stakeholders may advise the AUASB of issues that in their view should be considered by the AUASB or an international standard setter.
Add issue to the agenda
Once a relevant technical issue has been identified, the AUASB will develop a project proposal.
A project proposal contains an assessment of the potential benefits of undertaking the project, the costs of not undertaking it, the resources available and the likely timing.
The AUASB will then review the project proposal and make a decision as to whether the project is worthwhile and should be placed on its agenda (work program).
Research and consider issue
When an issue has been added to the agenda, the AUASB will discuss agenda papers developed and presented by AUASB staff. The agenda papers address the scope of issues, alternative approaches, and timing of outputs. They may draw upon relevant material from other standard setters, such as the IAASB, or from other organisations.
Consult with stakeholders
Once the research has been completed, the AUASB makes related documents available for public comment and discussion with stakeholders via one of the following document types.
Exposure Drafts (EDs)
An exposure draft typically is a draft of a proposed standard or draft amendment to a standard. An ED is likely to include more refined proposals in comparison with Discussion Papers and Consultation Papers.
The methods the AUASB uses to consult with stakeholders may also include the following:
The AUASB may hold formal and informal discussions with a range of stakeholders in connection with proposals issued for comment.
Annual Consultative Meeting
The annual AUASB Consultative Meeting brings together a cross-section of interest groups to increase their involvement in the standard-setting process.
Project Advisory Groups
The AUASB may invite stakeholders to a project advisory group: a group of people with expertise in a particular topic. Group members may be asked to provide advice and comments to staff and/or the AUASB members as agenda papers are developed to address an issue. Project Advisory Groups are generally chaired by a member of the AUASB.
Issue standard or other pronouncement
The outcome of the AUASB’s consideration of an issue may be the issuance of a pronouncement, such as a Standard, Guidance Statement, or a Bulletin. Alternatively, the AUASB might decide to address an issue by giving its view on the issue in the Highlights or Minutes of a meeting.
Submissions to the IAASB
The AUASB takes input received from Australian organisations and individuals into account when preparing its submissions to the International Auditing and Assurance Board (IAASB). The AUASB makes formal submissions on documents issued for comment by the IAASB, to contribute to the setting of international auditing and assurance standards.
Comments from stakeholders in Australia
The AUASB invites submissions and other input from stakeholders on the AUASB’s own proposals. The AUASB considers this input in making submissions to the IAASB and in developing its own pronouncements.
Implementation and compliance
The AUASB monitors the currency of auditing and assurance standards and guidance in Australia. This may lead to revisions to domestic AUASB standards or to submissions to the IAASB to propose changes to international standards.
Compliance with Australian auditing and assurance standards is monitored by other organisations, including:
- the Australian Securities and Investments Commission (ASIC)
- the Australian Prudential Regulation Authority (APRA)
- other Federal, State and Territory Government regulators
- CPA Australia (CPAA)
- The Institute of Chartered Accountants in Australia (ICAA)
- Institute of Public Accountants (IPA)
The AUASB receives feedback from the above organisations that assists it in assessing whether amendments to standards are required.