Presentation by Brendan Murtagh, IFAC SMP Forum June 2013

1. Page 1
Enhancing SMP Value through
Assurance and Practice
Management
IFAC Small and Medium Practices Forum
Brendan Murtagh, IAASB Member
June 5, 2013
Kampala, Uganda

2. Page 2
Hello!
Enhancing SMP Value through Assurance and
Practice Management

3. Page 3
How IAASB Supports Needs of SMEs and SMPs
• Proportionality of ISAs and ISQCs
– Considerations for smaller entities built into the ISAs where
considered appropriate – feedback from SMPs on
consultation particularly helpful
– Staff publication, Applying ISAs Proportionately with the Size
and Complexity of an Entity
– Staff publication, Applying ISQC 1 Proportionately with the
Nature and Size of a Firm
– Framework for Audit Quality

4. Page 4
• Market demands for services other than audit that
are capable of meeting the unique meets of SMEs
− Review engagements
− Compilation engagements
− Other assurance engagements
− Agreed-upon procedures engagements
How IAASB Supports Needs of SMEs and SMPs

5. Page 5
• To meet increased demand for standards as some jurisdictions
introduced statutory requirements for reviews instead of audits
• Effective for reviews of financial statements for periods ending
on or after December 31, 2013
ISRE 2400 (Revised) – Review Engagements

6. Page 6
• Key aspects of an ISRE 2400 (Revised) review
engagement
– Limited assurance engagement
– Emphasis on professional skepticism and professional judgment
– Work effort primarily consists of inquiry and analytical procedures, taking
into account an understanding of the entity and its environment
– Additional work if the auditor becomes aware of matters that cause the
practitioner to believe the financial statements may be misstated
– Report includes a negative conclusion (i.e., “Nothing has come to our
attention”) and other language to further differentiate reviews from audits
ISRE 2400 (Revised) – Review Engagements

7. Page 7
ISRS 4410 (Revised) – Compilation Engagements
• Aims to help practitioners performing compilation engagement
converge to the use of a globally accepted benchmark
• Addresses compilation engagements that involve the issuance of
a report
• Effective for compilation engagement reports dated on or after
July 1, 2013

8. Page 8
• Key aspects of an ISRS 4410 (Revised) compilation
engagement
– Non-assurance engagement
– Practitioner compiles financial information using the records, documents,
explanations, and other information, including significant judgments, provided
by management
– Management accepts responsibility for these significant judgments
– Report explains the purpose (and limitations) of a compilation engagement
and the value contributed by the practitioner’s involvement
ISRS 4410 (Revised) – Compilation Engagements

9. Page 9
Other Relevant Initiatives for SMPs
• Ongoing revision of ISAE 3000 addressing other assurance
engagements
– Expected to be approved September 2013
– Can be applied by SMPs to a range of subject matters

10. Page 10
Other Relevant Initiatives for SMPs
• Planned revision of ISRS 4400 addressing agreed-
upon procedures (AUPs) engagements
– Expected to commence in early 2014
– Possibility of AUPs being used with other services to create hybrid
engagements for SMEs

11. Page 11
Other Relevant Initiatives for SMPs
• ISA 700 (Proposed) - SME/SMP considerations
– Listed/SME differential
– Key audit matters for unlisted
– Going concern statement
– Internal review processes
– Compliance with ethical standards

12. Page 12
• IAASB Board priorities
– Audit quality
– ISA 720 (Other information)
– Auditing disclosures
– Monitoring Integrated Reporting
– ISA implementation monitoring
• IAASB consultation on its Strategy and Work Program for
2015–2019
– Consultation paper expected to be issued in early 2014
– SMPs encouraged to provide feedback as to how the IAASB can continue
to serve the needs of SMPs
Other Relevant Initiatives for SMPs

13. www.iaasb.org