NZAuASB Meeting 22 July 2020

Here is a summary of the main matters considered at the public session:

Update from Lyn Provost

The Board was joined by IAASB member, Lyn Provost, who provided an update on the IAASB’s June meeting, her roles on the IAASB and progress on the IAASB’s current projects:

• The suite of standards on quality management are expected to be approved by the IAASB at its September virtual meeting. It is expected that the implementation date for the QM standards will be 2022 with early adoption permitted providing the entire suite is early adopted. The IAASB will be developing some implementation materials for SMPs. There will be a role of national standard setters to help in that area.
• The comment period on the EER consultation paper has closed and the task force is now considering responses. Key themes include: support for examples in the guide; more guidance to explain the difference between reasonable and limited assurance; the order of the chapters; some areas seen as too theoretical, for example, professional judgement, assertions. The IAASB is targeting finalisation of the non-authoritative guidance in December/March.
• ISA 600 Audits of Group Financial Statements is currently out for consultation.
• Two new projects have commenced, on fraud and going concern, both in a research phase. Lyn Provost will chair the task force on fraud. 
• The less complex entities (LCE) project has been split into two streams. Roger Simnett, member of the NZAuASB and Chair of the Australian Auditing and Assurance Standards Board (AUASB), will chair the Complexity, Understandability, Scalability and Proportionality (CUSP) project which applies to the entire suite of standards. A separate task force will consider developing a separate standard for less complex entities. Craig Fisher, former NZAuASB member, has been invited to be part of the project advisory panel for the separate standard project.
• The Monitoring Group has published its recommendations to strengthen the international audit and ethics standards-setting system, including a public interest framework for development of standards. Lyn commented that the recommendations and public interest framework have been welcomed by the IAASB. She also considered that New Zealand played a key role in broadening the focus of the public interest framework beyond listed entities to include entities of all sizes. The report allows nine months to prepare the implementation plan with three years to implement. 

Meeting with Mike Burrell

The Board welcomed Mike Burrell, Executive Director, Sustainable Business Council (SBC) to the meeting. Mike briefed the Board more widely about the role of the SBC including, its purpose, membership, and wider strategy and work programme. There was a very positive discussion about the role of assurance in relation to sustainability and similar reporting.

Approval of Strategic Action Plan

The Board approved amendments to the NZAuASB’s Strategic Action Plan 2020-2025 and the 2020-21 strategic implementation plan, in line with the existing strategy of the XRB board. The amendments reflect the amended mandate for the NZAuASB concerning assurance related services, and take account of international developments including the IAASB’s strategic plan and the Monitoring Group’s new public interest framework. The plan and its strategic elements will be reviewed in detail following the XRB’s upcoming strategy discussion.