Presentation by Warren Allen, President, International Federation of Accountants at the Institute of Certified Public Accountant of Greece, in Athens, Greece, September 19, 2014

1. The Future of Audit
Warren Allen, President
International Federation of Accountants
September 19, 2014
Institute of Certified Public Accountants of Greece
Athens, Greece
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2. IFAC Overview
Strengthening Organizations, Advancing Economies
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IFAC Overview
• Supporting standards
development
• Improving quality and
capacity
• Supporting the profession
• Global representation and
advocacy

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The Changing Audit Environment
• Significant regulatory change has
occurred over the last 20 years
• The global financial crisis has triggered
more questions
• There is increased complexity in
financial reporting and global business
activity

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The Changing Audit Environment
• ICAEW/RSA AuditFutures report
• CPA Australia’s call for “audacious
goals”
• FEE public consultation on the future of
audit and assurance
• Denmark extended review engagement

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The Changing Audit Environment
• In response to the FEE discussion
paper, IFAC stated that:
– The accountancy profession must be
“forward-looking”
– There must be an open discussion on
alternatives to an audit
– The accountancy profession must
undertake critical self-examination

7. The IAASB’s Response as a Global Standard-Setter
• Enhancing the value of the audit
– Auditor Reporting
– A Framework for Audit Quality
– Audit of financial statement disclosures
– Other information/ISA 720
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A Framework for Audit Quality
• Key elements of audit quality:
– Input
– Process
– Outputs
– Interactions
– Contextual factors

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Beyond Audits
• ISAE 3000 (Revised)
• Revision of standards for Review
and Compilation Engagements
• Monitoring reporting trends

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Why Change the Auditor’s Report Now?
• Building a foundation
• Remaining relevant
• Enhancing public trust
• Meeting user demand for
information

11. Revised Requirements for Determining KAM
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• Focus on matters that required
“significant auditor attention” but revised
considerations in light of feedback
• More closely linked to matters likely to
be disclosed in the financial statement
• Second “filter” to select the matters “of
most significance”

12. Revised Requirements for Communicating KAM
• The IAASB has agreed to
retain flexibility in describing a
KAM
• The IAASB will provide further
guidance to support providing
relevant information
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Feedback on Going Concern
• Respondents continue to
advocate a holistic approach
• The IAASB to revert to
exception-based reporting
based on feedback to the
Exposure Draft
• The IAASB continues to work
with IASB and regulators

14. Feedback on Proposed Work Program 2015-2016
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• Focus on three priority projects
– Quality Control
– Special Audit Considerations Relating to
Financial Institutions
– Professional Skepticism

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IAASB Innovation Working Group
• Exploration of emerging
developments
• Possible actions
• Areas of Priority
– Integrated Reporting
– Effect of evolving use of technology on
audits

16. Will you join the global accountancy
community in Rome in November 2014?
www.wcoa2014rome.com
www.ifac.org