Clarity Project issued by IAASB
The IAASB has brought necessary arrangement to the present ISAs so as to make them simpler and easily understood.
The new set of standards – Clarity Project has strengthened the following key areas:-
- Communication with those charged with governance
- Risk assessment and inform those charged with governance of any shortfall in the Internal Control System.
The final set of clarified standards includes:
- One new ISA on communicating deficiencies in internal control;
- 16 ISAs containing new and revised requirements;
- 19 ISAs that have been redrafted only to reflect the new Clarity style; and
- One ISQC redrafted to reflect the new Clarity style.
Each standard now clearly identifies the objective of the auditor in the audit area addressed. One of the main goals of the IAASB in redrafting its standards was to eliminate any possible ambiguity about the requirements an auditor needs to fulfill; as a result, the objectives in each ISA are now supported by clearly stated requirements designed to enhance consistency of practice. In all cases, requirements are expressed by the phrase “the auditor shall.”
The clarified standards also have a new structure, in which information is presented in separate sections: Introduction, Objective, Definitions, Requirements, and Application and Other Explanatory Material. This restructuring, in addition to the other drafting enhancements, improves the readability and understandability of the standards.
Thirdly, specific groups of entities are addressed. Users can now find considerations specific to small- and medium-sized entities (SMEs) and public sector entities in the standards themselves. These considerations are highlighted in the Application and Other Explanatory Material section of the ISAs.
Financial Reporting Council
13 March 2009