Presentation by Phil Cowperthwaite at IFAC SMP Forum, March 2012

1. The ISAs and micro-entity
audits
Proportional application for effective and
efficient audits
Phil Cowperthwaite
Singapore March 19, 2012 Page 1 | Confidential and Proprietary Information

2. Assurance and related services for micro-entities
Audit? – ISAs and ISQC1
Review? – ISRE 2400 and ISQC 1
Compilation? – ISRS 4410 and ISQC1
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3. The ISAs and micro-entity audits
An audit is an audit is a fundamental principle
of IFAC
Is a proportionate approach ever possible?
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4. The ISAs and micro-entity audits
You only need to comply with:
A) Relevant ISAs [200.18]
B) Relevant Requirements [200.22]
But you do need to comply with all of these in every audit
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5. The ISAs and micro-entity audits
Total number of ISA requirements (2010) 572
Not usually relevant in a micro-entity audit (470)
Relevant in every micro-entity audit 102
e.g. #1 ISA 210, Terms of Engagement
Total number of ISA requirements (2010) 16
Not usually relevant in a micro-entity audit (13)
Relevant in every micro-entity audit 3
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6. The ISAs and micro-entity audits
e.g. #2 ISQC1 – Is it relevant?
It requires
o Ethical behaviour
o Know your client
o Competent audit team members
o Have time to do the work properly
o Adequate and timely documentation
o Self evaluation annually
Low risk micro-entity engagements need no EQCR
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7. The ISAs and micro-entity audits
How to #1:
Read and understand the standards.
You cannot know what to leave out if you do not know what
is in there in the first place
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8. The ISAs and micro-entity audits
How to #2:
o Automate your practice
o Staff appropriately
o Do the work on site
o Specialize if you can
o Communicate/communicate/communicate
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9. The ISAs and micro-entity audits
The career of a professional accountant in public practice is
and always has been one of life long learning.
Thank you for your attention.
Wishing you happy and profitable auditing

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10. www.ifac.org