NZAuASB Meeting 7 June 2017

Event Date 07 June

Date And Time

Location:
Level 7
50 Manners Street
Wellington 6011

Here is a summary of the main matters considered.

The Audit of Service Performance Information

The NZAuASB considered a draft Invitation to Comment (ITC) and Exposure Draft (ED) on the audit of service performance information. The Board intends to approve the ITC and ED soon, and issue a Communique requesting comments.

Consideration of IESBA Exposure Drafts

The NZAuASB considered its draft response to the International Ethics Standards Board for Accountants’ (IESBA) Survey on its Strategy and Work Plan Beyond 2018. 

The input from this survey will inform the IESBA as it develops its proposed new strategy and work plan, which it expects to issue for formal public consultation in 2018. 

The NZAuASB is awaiting any further feedback before submitting the survey to IESBA which is due on 18 July. 

The NZAuASB encourages you to respond to the survey.  This is your chance to contribute your views so that the IESBA and the NZAuASB can better focus their efforts on the needs of stakeholders.

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Proposed international standard on auditing accounting estimates

The NZAuASB considered and discussed the International Auditing and Assurance Standards Board (IAASB)’s proposed changes to ISA 540, in regard to how auditors evaluate accounting estimates and related disclosures.

The NZAuASB also noted the feedback received from roundtables held in Auckland and Wellington on the proposed changes, as well as feedback from roundtables held by the Auditing and Assurance Standards Board (AUASB) in Australia.

The NZAuASB intends to approve the submission to the IAASB at its next meeting in July, and encourages auditors to submit their views—either directly to the IAASB by 1 August, or to the NZAuASB by 1 July.

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Research on the assurance needs of users of not-for-profits financial information

The NZAuASB received the findings on this research in regard to small entities in the not-for-profit (NFP) sector that are not required to have a statutory assurance engagement.

Results indicate that:

  • The information needs of NFPs’ stakeholders are only partially served by the general purpose financial report.
  • Stakeholders also have a strong interest in information that is not measured or presented in financial terms, in particular information about operational capability (including governance and financial management) and the NFP’s impact on its target communities.
  • Many stakeholders already collect that type of information, and undertake activities to ensure its quality.
  • Those spoken to also believe there would be high demand for alternative types of assurance products, which the Board thought could range from use of simple checklists to independent assurance over non-financial information prepared under appropriate principles and standards.

The research is of great interest to the AUASB, which is aware of similar issues in the NFP sector in Australia. The NZAuASB and the AUASB will jointly further explore the viability of developing a new engagement standard and/or guidance to meet the NFP stakeholder needs.

We will publish the research report on our website soon.

National Standard Setters Meeting

The NZAuASB discussed the agenda for the upcoming IAASB and IESBA national standard setters meeting to be held in New York in mid-June.

In particular, the Board discussed the New Zealand perspective to be shared on the proposed standards on non-financial reporting, as well as issues related to audits of small and medium entities, auditor reporting, professional scepticism, fee related matters on non- audit services, and emerging technology and innovation issues.

Long Association

The NZAuASB discussed the implications of the effective date for proposed changes in PES 1 (Revised) Code of Ethics for Assurance Practitioners on auditor rotation requirements. This is currently open for consultation in New Zealand with a closing date of 31 July.

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The proposed changes are effective for audits of financial statements for periods beginning on or after 15 December 2018. 

Because these changes do not come with a transitional provision, the proposals will apply retrospectively. Audit firms should therefore already be factoring in the proposed changes to their rotation plans.

Webinar – Auditor Rotation

The XRB is running a free webinar on Thursday 22 June to raise awareness of and seek feedback on the New Zealand exposure draft on auditor rotation.

Register here button

Next meeting

26 July 2017