APB Changes How Auditors’ Role Looks Through ISA 700 Amendments
Seeing the increasing importance that investors are giving to the role of auditors in financial reports, the Auditing Practices Board (APB) has amended the ISA (UK and Ireland) 700 “The Auditor’s Report on Financial Statements” and Bulletin 2010/2.
According to APB chairman Richard Fleck, investors who rely on annual financial statements as a source of information related to their firms are increasingly on the lookout for the auditors’ participation in the reports.
He said this view from investors pushes the APB to revise the description of the scope of audit.
The amended ISA (UK and Ireland) 700 now defines the auditors’ responsibility under ISA to include reviewing the information stated in financial reports so as to make sure all of the materials presented are not products of fraud.
However, the amended ISA (UK and Ireland) 700 is still not applicable in Ireland as its version that has been taking effect in the country since December 14, 2004 is still in use by Irish firms.
The ISA (UK and Ireland) 700 will take effect in the United Kingdom after March 23, 2011.
The amendments make the description of the auditors’ role more generic when applied to any organizations.
Meanwhile, the amended Bulletin 2010/2 changes the “illustrative auditor’s reports to reflect the change to the short form description of the scope of an audit.”