International Auditing and Assurance Standards Board

International Auditing and Assurance Standards Board
Name	International Auditing and Assurance Standards Board
Formation	1977
Type	Standard-setting body
Headquarters	New York City
Leader title	Chair
Leader name	Michael Domingos
Parent organization	International Federation of Accountants

International Auditing and Assurance Standards Board is an independent standard-setting board that develops International Standards on Auditing, International Standards on Assurance Engagements, and related guidance for use by professional accountants and audit firms worldwide. It operates within a global framework involving regulatory bodies such as the International Organization of Securities Commissions, standard-setters including the Financial Accounting Standards Board, and multilateral institutions like the World Bank. Its outputs influence practices in jurisdictions that also interact with entities such as the European Commission, the Securities and Exchange Commission, and national institutes including the Institute of Chartered Accountants in England and Wales and the American Institute of Certified Public Accountants.

History

The origins trace to the International Federation of Accountants establishment of a committee in the late 20th century, responding to transnational challenges highlighted by events like the Enron scandal and regulatory responses exemplified by the Sarbanes–Oxley Act of 2002. Early milestones include issuance of foundational pronouncements paralleling work of the Financial Reporting Council (UK) and harmonization efforts similar to the International Accounting Standards Board agenda. The Board expanded remit across audit, assurance, and quality management amid global crises that engaged stakeholders such as the International Monetary Fund and multinational audit networks like the Big Four accounting firms.

Governance and Structure

Governance is shaped by oversight mechanisms involving the Public Interest Oversight Board and funding relationships with bodies including the World Bank Group and national accountancy organizations such as the Institute of Chartered Accountants of India. The Board comprises professional members, technical advisors, and ex officio representatives drawn from organizations like the Organization for Economic Co-operation and Development and standard-setting forums such as the International Organization for Standardization. Committees and advisory groups mirror structures found in bodies such as the European Financial Reporting Advisory Group and coordinate with regulators like the Canadian Public Accountability Board to align agendas, selection processes, and conflict-of-interest safeguards.

Standards and Guidance

Primary outputs are sets of pronouncements comparable to frameworks by the International Accounting Standards Board and include International Standards on Auditing, quality management standards akin to initiatives by the Committee of Sponsoring Organizations of the Treadway Commission, and assurance standards for sustainability reporting resonant with initiatives by the Global Reporting Initiative and Task Force on Climate-related Financial Disclosures. Guidance documents address audit evidence, risk assessment, fraud considerations, and auditor reporting, intersecting with terminology used by the Basel Committee on Banking Supervision for financial institutions and disclosures promoted by the Financial Stability Board.

Due Process and Public Interest Oversight

Standard-setting follows a consultative due process engaging stakeholders such as national standard-setting bodies like the Financial Reporting Council (UK), investor groups exemplified by Institutional Shareholder Services, and audit firms including Deloitte, PricewaterhouseCoopers, Ernst & Young, and KPMG. Public-interest oversight is exercised through mechanisms comparable to oversight in international organizations such as the International Labour Organization and is informed by inputs from law-making bodies exemplified by the European Parliament and national regulators like the Australian Securities and Investments Commission. Transparency, exposure drafts, and comment letters are tools used to ensure alignment with expectations set by the Organisation for Economic Co-operation and Development and multilateral lenders.

Implementation and Global Adoption

Adoption pathways mirror those used by the International Financial Reporting Standards and involve endorsement by national regulators including the Financial Services Agency (Japan) and standard-setters like the Accounting Standards Board of Japan. Implementation support is provided through capacity-building programs similar to technical assistance from the International Monetary Fund and regional accountancy forums such as the Asia-Oceania Tax Consultants' Association and the Pan African Federation of Accountants. Convergence efforts have involved bilateral dialogues with the U.S. Public Company Accounting Oversight Board and multilateral coordination with entities like the European Securities and Markets Authority to address cross-border audit challenges.

Criticisms and Controversies

Critiques echo those directed at international regulatory frameworks like the Basel Accords and include concerns about influence from the Big Four accounting firms, perceived gaps in enforcement comparable to debates over International Criminal Court jurisdiction, and responsiveness to complex financial instruments spotlighted in cases involving the Lehman Brothers collapse. Debates have focused on standard granularity versus principles-based approaches akin to tensions in the International Accounting Standards Board community, the balance between global uniformity and national sovereignty as seen in European Union legislative processes, and timeliness of revisions during crises similar to responses after the Global Financial Crisis.

Category:International auditing Category:Standard-setting organizations