Development and Convergence of Auditing Standards and

Methodology

EUROSAI Seminar on Financial Audit StandardsOctober 2008

Deputy Director General Kelly ÅnerudTechnical Advisor, IAASB

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INTOSAI’s Professional Standards Committee

INTOSAI Professional Standards Committee(Denmark)

INCOSAI

INTOSAI Governing Board

Accounting Standards & Reporting (Canada)

Internal control Standards(Belgium) Performance

Audit (Brazil)

Compliance Audit (Norway)

Financial Audit Guidelines (Sweden)

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INTOSAIs Framework of Standards

International Standards for Supreme Audit Institutions (ISSAI)

Description DocumentsFounding Principles •Lima Declaration

Prerequisites for the Functioning of SAIs

•Code of Ethics•Independence

Fundamental Auditing Principles

•Auditing Standards

Auditing Guidelines •Financial audit•Compliance audit•Performance audit

Guidance for Good Governance (GOV)•Guidance on Internal Control Standards•Guidance on Accounting Standards

www.issai.org

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International Standards

International

Standard on

Auditing

Practice

Note

+

International Standards of Supreme Audit Institutions

=

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Development of Standards and Guidelines INTOSAI & IFAC

INTOSAI Professional Standards Committee

INCOSAI

INTOSAI Governing Board

Accounting Standards & Reporting

Internal control Standards

Performance Audit

Compliance Audit

Financial Audit Guidelines

Focus Group

Project Director & Project Secretariat

Reference Panel

Issues paper

First read

Exposure draft

Review of comments

Final ISA

PSC IAASB

INTOSAI ”Practice Note”

INTOSAI-nominated

member & TA

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IAASB’s Clarity Project

• Based on findings in IFAC report from 2004 – ”Rebuilding Public Confidence in Financial Reporting”

• EU’s need for international auditing standards• All ISAs redrafted based on Clarity drafting conventions • New structure:

• Introduction• Objective• Requirements (use of ’shall’)• Application Material• (Definitions if necessary)

• Drafting techniques (bullet lists,considerations for SMEs and public sector entities)

• INTOSAI’s Clarity Review Group

Clarity - 2008

INTOSAI - 2010

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Development and updating

Implementationand training

Monitoring implementation

Communication with stakeholders

Audit Standard Setting - Value Circle

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List of Acronyms

• CAG – IAASB’s Consultative Advisory Group• CAS – INTOSAI’s Compliance Audit Subcommittee• COSO – Committee of Sponsoring Organizations of the Treadway Commission

(internal control framework)• FAS – INTOSAI’s Financial Audit Guidelines Subcommittee• IAASB – International Auditing and Assurance Standards Board• IASB – International Accounting Standards Board• IC – Internal Control• IFAC – International Federation of Accountants• INCOSAI –INTOSAI’s Congress – held every 3 years• INTOSAI – International Organization of Supreme Audit Institutions• ISA – International Standard on Auditing• ISQC – International Standard on Quality Control• ISSAI – International Standards for Supreme Audit Institutions• PAS – INTOSAI’s Performance Audit Subcommittee• PCAOB – Public Company Accounting Oversight Board• PN – Practice Note• PSC – INTOSAI’s Professional Standards Committee• SAI – Supreme Audit Institution• SET – INTOSAI Special Expert Team• SME – Small and medium sized entity