APB consults on revisions to auditing standards addressing the use of internal audit

News types: Consultation Announcement

Published: 30 May 2012

APB PN 162
The Auditing Practices Board (APB) of the Financial Reporting Council (FRC) today issues a consultation on proposed revisions to International Standards on Auditing (ISAs) (UK and Ireland) addressing the use of internal audit to adopt changes to the corresponding ISAs issued by the International Auditing and Assurance Standards Board (IAASB).
The proposed changes are designed to:

  • Enhance the auditors risk assessment procedures for entities with an internal audit function, and

  • Provide a more robust framework for evaluating and using the work of an internal audit function including in appropriate, limited, circumstances obtaining direct assistance from internal audit staff under the supervision and control of the external auditor. 


A copy of the APB consultation paper may be downloaded free of charge from the publications section  of the FRC website.
 
Nick Land, a director of the FRC and chairman of the APB, said:

“In appropriate circumstances external auditors may be able to improve the efficiency or effectiveness of the audit of financial statements by using the work of an internal audit function as part of the evidence obtained.  These proposals are designed to adopt changes to International Standards on Auditing that the APB has considered and believes will enhance the relevant auditing standards applied in the UK and Ireland. The APB would welcome responses not just from auditors but also other parties with an interest in the audit including audit committees and users of financial statements.”

Notes to editors

  1. The FRC is the UK’s independent regulator responsible for promoting high quality corporate governance and reporting to foster investment.

  2. The APB is committed to leading the development of auditing practice in the United Kingdom and the Republic of Ireland so as to:

    • establish high standards of auditing;

    • meet the developing needs of users of financial information; and

    • ensure public confidence in auditing.

  3. The proposed changes set out in this consultation paper are for ISAs (UK and Ireland):

  4. with conforming amendments to other ISAs (UK and Ireland).  An Invitation to Comment in the consultation paper gives a fuller explanation of the background to, and the rationale for, the proposed changes.

    • 315 (Revised) Identifying and assessing risks of material misstatement through understanding the entity and its environment

    • 610 (Revised) Using the work of internal auditors

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