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9 Apr. 2015

IAASB issues new standard on the auditor’s responsibilities for other information included in an annual report

The revised standard, ISA 720 The Auditor’s Responsibilities Relating to Other Information was released today by the International Auditing and Assurance Standards Board (IAASB). The standard, and its related conforming amendments to other ISAs, aims to clarify and enhance the auditor’s focus on “other information” included in entities’ annual reports to ensure that it is not materially inconsistent with the audited financial statements.  It also includes new requirements that complement recently announced changes to the new and revised auditor reporting standards. 

The IAASB’s development of ISA 720 has involved extensive deliberations, research, public consultations and outreach with practitioners, policy makers, regulators, national standard setters, investors and other stakeholders. The AUASB has been actively involved with this project since its inception and has already developed a high level approach to integrating the changes into the Australian Auditing Standards. 

The Standard, and its related conforming amendments, will be adopted by the AUASB and modified only where compelling reasons exist, such as to accommodate Australian legislative requirements.  Issues that have been previously identified and will be further discussed at the AUASB’s upcoming 20 April 2015 meeting. 

ISA 720 and related conforming amendments will be used to create an Australian exposure draft, which the AUASB will consider at a special meeting on 19 May 2015.  The exposure draft will be issued in late May, and will have a 60 days exposure period. 

Concurrent with the auditor reporting standards, ASA 720, once finalised, will be effective for financial reporting periods ending on or after 15 December 2016.

The IAASB has remaining changes in the pipeline related to the disclosures projects, and consequential auditor reporting related changes to the special purpose reporting standards (ISA 800 and ISA 805 – currently on exposure, closes 22 April 2015).  Progressive release of the changes by the IAASB is expected during this year.

The IAASB has issued an “At a Glance” summary of the changes which highlights key aspects of the revised standard.

IAASB Media Release