IAASA has published a thematic paper discussing the use of data analytics in Ireland’s statutory audit market, available here. IAASA’s paper provides an overview of the areas where auditors perform data analytical audit procedures and supports in place for auditors in using data analysis tools. IAASA’s paper also discusses challenges faced by auditors when using data analytics and looks at plans for further development and roll out of data analytics in audit. IAASA’s paper identifies key considerations for audit committees and sets out the focus of audit regulators with regard to data analytics, both from an international and an Irish perspective. The appendices to IAASA’s paper provide some examples of data analysis supports and the use of data analysis in audit areas. IAASA’s YouTube channel also now includes a video that shares key observations set out in the paper, available here. IAASA has also published some factsheets summarising insights from this paper. The factsheets on data analytics are available here.

External assurance plays a key role in enhancing trust and confidence in financial and non-financial reporting. With the goal of enhancing the trust and confidence investors, regulators and other stakeholders have in sustainability information the International Auditing and Assurance Standards Board (IAASB) has developed a landmark, global sustainability assurance standard. This proposed International Standard on Sustainability Assurance (ISSA) 5000, General Requirements for Sustainability Assurance Engagements, was issued  for public consultation on August 2 and stakeholders have until December 1 to provide feedback and insights to the IAASB. The final standard will be issued before the end of 2024. Join the Irish Auditing & Accounting Supervisory Authority (IAASA) and IAASB webinar to hear about ISSA 5000.  Proposed International Standards on Sustainability Assurance Webinar - 29 September - 2pm You can register for the webinar at the following link: https://lnkd.in/e6ZetJKg You can find more information about the proposed standard on the website of the IAASB 

Chartered Accountants Ireland have issued  Technical Release 01/2023 Safeguarding reporting for payment and electronic money firms. The purpose of this Technical Release (TR) is to provide assistance to auditors who are engaged by Payment and Electronic Money (E-Money) institutions (the Firms) following a request from the Central Bank of Ireland to carry out an engagement pursuant to a letter to the Firms dated 20 January 2023 and a further communication on 25 May 2023. The TR was prepared in consultation with the Central Bank of Ireland.  The deadline for the reports is 31 October 2023. The letter sent to payment and electronic money firms requested the firm to obtain a specific audit of compliance with the safeguarding requirements under the European Union (Payment Services) Regulations 2018 (“PSR”) and/or European Communities (Electronic Money) Regulations 2011 (“EMR”).  As set out in the Central Bank letter one of the most important objectives for the Central Bank is that user funds are protected. Recent submissions from the sector as well as other communications received from firms highlighted that one in four payment and e-money firms have self-identified deficiencies in the safeguarding risk management frameworks . The nature and scale of these deficiencies indicated that some firms do not have robust safeguarding arrangements in place. The Firm has been asked to prepare a detailed document setting out a description of certain aspects of its organisational arrangements to secure its compliance with the relevant safeguarding requirements under the PSR/EMR and an assertion, approved by the board of directors, stating that in all material respects the description is fairly presented and the controls and processes included in the description were operating as described at the reference date. The statutory auditor (or other audit firm) performs a reasonable assurance attestation engagement, in relation to this assertion. This engagement is separate from the statutory audit of the financial statements of the Firms and does not in any way form part of the statutory audit and may be carried out by the Firm’s statutory auditor or other audit firm. This guidance has been prepared in consultation with the Central Bank. This TR should be read in conjunction with International Standard on Assurance Engagements 3000 (Revised) “Assurance engagements other than audits or reviews of historical financial information” (ISAE 3000 (Revised)).

Following the Central Bank of Ireland’s Dear CEO letter of 20 January 2023 and, in particular, the requirement that payment and e-money firms obtain a specific audit of their compliance with the safeguarding requirements under the PSR/EMR an acceptable format for these engagements has been agreed. We will issue guidance to our members on performing these engagements in due course.  Payment and e-money firms are required to prepare a detailed document setting out a description of aspects of their organisational arrangements to secure their compliance with the relevant safeguarding requirements under the PSR/EMR.   Theses forms should also prepare an assertion, approved by the Board of directors, stating that in all material respects 1 the description is fairly presented, and 2 the controls and processes included in the description were operating as described at the reference date. Further details are outlined in the Safeguarding Notice to Payment and E-Money Firms. These reports are due by 31 October 2023.  Members will be informed via eNews when our guidance is published. 

Chartered Accountants Ireland has responded to the IAASB consultation on the Proposed Part 10, Audits of Group Financial Statements of The Proposed ISA For Audits of Financial Statements of Less Complex Entities (ISA for LCE).  The initial proposed ISA for LCE (in 2022) excluded all groups from the scope of the standard, the proposed changes would include some groups, a move we welcome in our response. The IAASB envisions approving a final standard in December 2023. Institute responses to recent consultations can be read here.

The International Ethics Standards Board for Accountants (IESBA) has released final revisions to the International Code of Ethics for Professional Accountants (including International Independence Standards) to further increase the Code’s robustness and expand its relevance in a world being fundamentally reshaped by rapid technological advancements and accelerating digitalization. These technology-related revisions will guide the ethical mindset and behavior of professional accountants in both business and public practice as they take advantage of the opportunities created by technology and adapt to new technology. Developed to remain relevant and applicable in the ever-evolving landscape of technology transformation, the revisions apply to the use of any technology, including to the extent possible, future technologies.  The revisions, which were informed by extensive fact-finding and stakeholder outreach: Strengthen the Code in guiding the mindset and behavior of professional accountants when they use technology. Provide enhanced guidance fit for the digital age in relation to the fundamental principles of confidentiality, and professional competence and due care, as well as in dealing with circumstances of complexity. Strengthen and clarify the International Independence Standards (IIS) by addressing the circumstances in which firms and network firms may or may not provide a technology-related non-assurance service to an audit or assurance client. The revisions to the IIS will be effective for audits and reviews of financial statements for periods beginning on or after December 15, 2024. The other revisions to the ethics provisions of the Code will be effective as of December 15, 2024. Early adoption is permitted.

The Law Society has published new Solicitors Accounts Regulations which come into operation on 1 July 2023 replacing the current regulations issued in 2014. The key impacts on the reporting accountants are:  Reporting accountant’s reports are to be filed within five months of the accounting date. Reporting accountant to test check postings before and after accounting date. Reporting accountants to test check that withdrawals of fees are notified to the clients. Reporting accountants may report, directly to the Law Society, an opinion or a suspicion of a deficit, rather than waiting to submit annual report. Closing reporting accountant’s reports are to be filed within three months of cessation. Reasons are to be provided for withdrawal of approval of a Reporting accountant. A listing of client ledger balances outstanding two years or more is to be prepared at the accounting date and furnished to the Law Society by the Reporting Accountant. For further information on the significant changes that impact on solicitors see the Law Society webpage.  The new regulations can be accessed here  Further information and updated guidance will be published by Chartered Accountants Ireland in due course. 

The FRC has issued guidance for audit firms on eligibility criteria in the context of the firm’s system of quality management and the performance of engagements. ISQM (UK) 1 and ISQM (UK) 2 have been reissued with updated footnotes to reflect this guidance.   View the guidance and ISQMs (UK).

The Irish Auditing and Accounting Supervisory Authority (IAASA) has published a summary of the outcomes of its examinations of financial reports completed in 2022. This summary outlines the findings from financial statement examinations completed by IAASA’s Financial Reporting Supervision Unit in 2022. The summary shows that the level of compliance by companies with financial reporting requirements is generally good particularly among equity issuers. However, certain companies, particularly some fund and debt issuers, have further progress to make in achieving consistently high-quality financial reports. Utilising the range of powers at its disposal, three companies were required by IAASA to publish corrective public notices which highlighted deficiencies in their published financial reports. The summary illustrates the growing impact of climate change and climate impact mitigation initiatives on companies. It also reflects the increasing focus of IAASA and accounting enforcers generally on the financial reporting implications of climate change and climate commitments by companies. This is a feature that we expect to assume increasing significance in the future as companies move to comply with emerging climate reporting standards. The summary may be accessed here

IAASA has published the 2022 quality assurance review reports in respect of seven firms that perform statutory audits of public-interest entities. In Ireland, public-interest entities include listed companies and companies that operate in the banking and insurance sectors. The reports can be accessed here

A new publication from Accountancy Europe builds on the factsheet published last year and offers constructive recommendations based on the discussions with their members’ audit experts as well as external stakeholders involved in developing AQI initiatives in their respective jurisdictions. The paper highlights the key considerations for developing and using AQIs to support potential debates that could take place among the European Commission, the Committee of European Audit Oversight Bodies (CEAOB), national policymakers and regulators, auditors, as well as other parties. Accountancy Europe want to keep contributing to this debate; since the evolution of AQI reporting as a means to support audit quality requires continuous discussion with all relevant stakeholders. To support this objective and build on the factsheet (May 2022), this publication: defines key concepts related to audit quality presents considerations for developing Audit Quality Indicators (AQIs) explains what can and cannot be achieved by AQI reporting AQIs are not ends themselves but are one important means to increase the audit work’s transparency and to support consistent, high-quality audits. A blend of AQIs can help focus on the areas where improvement is needed. Key factors to develop and use audit quality indicators - Accountancy Europe

This video provides information on the revised ISA (Ireland) 315 Identifying and Assessing the Risks of Material Misstatement. ISA 315 is effective for financial periods beginning on or after 15 December 2021. IAASA video presentation on the revised ISA (Ireland) 315 – IAASA