IAASB Values Relationship with PCAOB

In its annual report, the International Auditing and Assurance Standards Board named the PCAOB as one of its key stakeholders as the goal of global auditing standards comes into sharper focus. Recently, the IAASB completed its Clarity Project to revise and redraft all of its 36 international auditing standards as a precursor to a global set of accepted auditing standards.

The IAASB said that its observer status at meetings of the PCAOB’s Standing Advisory Group allows it to keep in touch with PCAOB develop­ments and provide the PCAOB with an international view on a number of its auditing standards projects. The advisory group meets two or three times a year and, at these meetings, the IAASB is often represented by its Chair. This activity complements the PCAOB’s observer membership on the IAASB’s Consultative Advisory Group.

The IAASB pledged to find ways to work together more closely with the PCAOB. Both Boards agree that it is desirable to avoid unnecessary differences between their respective standards. To that end, the IAASB noted that the PCAOB recently issued a proposed new auditing standard related to the auditor’s assessment of and response to risk in an audit. The Board was pleased to note that the PCAOB began by consider­ing international auditing standards with the aim of achieving a degree of commonal­ity, while at the same time recognizing that certain changes were necessary. The IAASB said that it would continue to monitor the PCAOB as it continues its work on these important standards. The IAASB views the use of its international standards as a basis for the PCAOB’s proposed new standard as a testament to the value placed on the IAASB’s standard-setting pro­cesses and output.