Just before Christmas, the Auditing Practices Board published a revised edition of Practice Note 26, tackling the issue of how new ISAs can be applied when auditing smaller entities.
Regular readers of my blog will know that the ICAEW has been a great supporter of the Clarity project and the adoption of new ISAs, not just in the UK but also within the European Union. We have also been urging regulators and standard setters to develop an effective implementation programme, particularly when it comes to SMEs where there have been concerns about the relevance and applicability of these new standards.
Practice Note 26 is therefore a very welcome and helpful contribution. The guidance and in particular, the examples included, outline different approaches that can be taken to different situations. These should help practitioners avoid unnecessary documentation which can add disproportionately to the cost of an audit, particularly for an SME.
ISAs are now set to be implemented in the UK for accounting periods that end on or after 15 December 2010. The focus now is on the auditors who need to be familiar with and ready in good time to use them. The ICAEW’s Audit and Assurance Faculty’s new ISA website is a great resource and place to start.