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This update was first published in the May 2012 International edition of Accounting and Business magazine.

The International Auditing and Assurance Standards Board (IAASB) has issued a revised version of ISA 610, Using the Work of Internal Auditors. The standard addresses the responsibilities of external auditors when they are using the work of internal auditors.

Revisions have also been made to ISA 315, Identifying and Assessing the Risks of Material Misstatement Through Understanding the Entity and its Environment, to explain how the internal audit function and its findings can assist in making risk assessments.

The revised standards are effective for audits of periods ending on or after 15 December 2013.

In revising ISA 610, the IAASB has also agreed requirements and guidance on the responsibilities of external auditors where they intend to use internal auditors to assist them during the audit.

The IAASB has been liaising closely with the International Ethics Standards Board for Accountants (IESBA) and will only incorporate the further changes into ISA 610 when the IESBA has completed its deliberations on proposals to change the definition of engagement team.

The change in definition will address a perceived inconsistency in respect of the ability of external auditors to use a client’s internal auditors.

Yvonne Lang, director, Smith & Williamson

Last updated: 18 Mar 2014