| The New Zealand Auditing and Assurance Standards Board (NZAuASB) held its most recent meeting on 27 June 2012 in Auckland.
The main matters considered were:
- the Australian Auditing and Assurance Standards Board's (AUASB) feedback on the strategy for achieving greater convergence with international standards and the harmonisation of assurance requirements between New Zealand and Australia;
- consideration of current differences in the auditing assurance standards applying in both New Zealand and Australia;
- approval of the following final pronouncements:
- ISAE (NZ) 3420 Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus;
- Joint AUASB/NZAuASB publication, Applying the Auditing Standards in Audits of Smaller Entities;
- IAPN (NZ) 1000, Special Considerations in Auditing Financial Instruments;
- approval of exposure draft ISAE (NZ) 3410 Assurance on a Greenhouse Gas Statement;
- the NZAuASB's response to the release of the international consultation paper looking at ways to improve the auditor's report; and
- proposed amendments to the international ethical standards for dealing with suspected illegal acts.
Click here to access the papers discussed at the meeting.
Convergence with international standards and Trans-Tasman Harmonisation of Standards
The NZAuASB considered feedback from the AUASB on the proposed principles for achieving convergence to international auditing and assurance standards, and for the harmonisation of standards between Australia and New Zealand. Both standard setting Boards have agreed to approve the strategy / principles document out of session after some minor adjustments had been made. Once finalised, the principles will be made available on the XRB's website.
The NZAuASB also considered an assessment of the current differences between the equivalent New Zealand and Australian auditing and assurance standards, and whether there were any compelling reasons to address these differences in the New Zealand standards. The NZAuASB has identified a number of instances where it may be appropriate for the current New Zealand standards to be modified and more closely aligned to the equivalent Australian requirements. The NZAuASB will further consider these potential amendments at its August meeting.
Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus
The NZAuASB approved for release a new assurance standard, International Standard on Assurance Engagements (New Zealand) (ISAE (NZ)) 3420, dealing with engagements to report on the compilation of Pro Forma financial information included in a prospectus.
The standard may have limited application in New Zealand but conforms with the equivalent international standard, and is therefore consistent with the NZAuASB's strategy of maintaining a body of auditing and assurance standards that are consistent with those that have been issued internationally by the IAASB. The NZAuASB did not identify any compelling reason to modify the equivalent international standard for application in New Zealand. The standard is effective for assurance reports dated on or after 31 March, 2013.
Applying Auditing and Assurance Standards to the Audit of Smaller Entities
The NZAuASB, together with the AUASB, have approved a joint guidance document for release that addresses some common questions and concerns about the suitability and application of the current auditing and assurance standards to the audits of small and medium-sized entities.
Special Considerations in Auditing Financial Instruments
The NZAuASB approved for release a new form of guidance pronouncement, International Auditing Practice Note (New Zealand) (IAPN (NZ)) 1000, Special Considerations in Auditing Financial Instruments. IAPN (NZ) 1000 conforms with the equivalent international pronouncement issued by the IAASB.
Assurance on a Greenhouse Gas Statement
The NZAuASB has approved for release exposure draft ISAE (NZ) 3410, Assurance on a Greenhouse Gas Statement. ISAE (NZ) 3410 is a proposed new standard dealing with assurance engagements to report on greenhouse gas statements. Submissions on the exposure draft are due to the NZAuASB by 1 October, 2012.
Project on Auditor Reporting
The International Auditing and Assurance Standards Board has recently released its consultation paper on "Improving the Auditor's Report", with comments due by 30 September 2012.
The NZAuASB will continue to actively engage and consult with constituents and stakeholders in New Zealand between now and September on the IAASB's proposals. The NZAuASB is interested in better understanding what users of the auditor's report would value most in terms of the changes proposed by the IAASB to the auditor's report.
The NZAuASB is particularly keen to obtain the views of those stakeholders that it was unsuccessful in obtaining in the first round of consultations in April. The NZAuASB will also liaise with the AUASB on similar discussions held in Australia, to ensure that, where appropriate, trans-Tasman issues and priorities can be raised with the IAASB.
Feedback to constituents on the results of the NZAuASB's consultation with stakeholders held during April, and on discussions held at the IFAC 2012 National Standard Setters meeting on auditor reporting, is available on the XRB website.
Responding to Suspected Illegal Acts
The NZAuASB considered a proposed exposure draft expected to be released by the International Ethics Standards Board for Accountants (IESBA) on responding to suspected illegal acts. Once the IESBA finalises the exposure draft, and after the NZAuASB's further consideration out of session, the NZAuASB expects to release the international exposure draft and an invitation to comment in New Zealand.
Update on ISRE 2400(Revised) Engagements to Review Historical Financial Statements
The IAASB approved for issue ISRE 2400(revised) in June 2012. The NZAuASB will consider the Standard at the August meeting.
The next meeting of the NZAuASB is on 23 August 2012 in Wellington.