NZAuASB Meeting 25 October 2017

Event Date 25 October

Date And Time

Level 7
50 Manners Street
Wellington 6011

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Here is a summary of the main matters considered:

Auditor rotation

The NZAuASB approved the New Zealand amendments to the Code of Ethics for Assurance Practitioners Provisions Addressing the Long Association of Personnel with an Assurance Client.

The amendments are effective for audits of financial statements for periods beginning on or after December 15, 2018. 

The biggest impact of these changes will be to extend the cooling-off period of the engagement partner and engagement quality control reviewer for engagements of public interest entities.

We will send a separate communique when the amendments have been issued, together with explanations for decisions made by the NZAuASB in finalising the New Zealand amendments.

Public interest entities (PIEs)

The NZAuASB approved an invitation to comment (ITC) and exposure draft proposing changes to the definition of a Public Interest Entity in Professional and Ethical Standard 1 (Revised).

During the consultation on ED2017-1, Proposed Amendments to PES 1 (Revised) Provisions Addressing the Long Association of Personnel with an Assurance Client, the Board sought comment about the definition of a Public Interest Entity.

In response to that feedback, the NZAuASB is proposing to amend the definition of Public Interest Entity in PES 1 (Revised) to exclude those entities that are not legally required, but choose, to apply the Tier 1 financial reporting requirements.

The exposure draft seeks feedback on the proposed amendment to define a public interest entity as, “any entity that meets the Tier 1 criteria in accordance with XRB A1 [1] and is not eligible to report in accordance with the accounting requirements of another tier”.

Submissions on the proposals are due by 27 November 2017.

> Access the Invitation to Comment

[1] XRB A1 Application of the Accounting Standards Framework

The New Zealand experience of the new auditor’s report

In conjunction with the FMA, the Board is working on a report that explores the New Zealand experience in implementing the first round of the new auditor’s report for listed issuers[2], containing key audit matters .

The Board has completed its interviews and surveys and provided feedback on a draft report.

The report is expected to be published by the end of November 2017.

[2]  The term “listed issuer” is defined in ISA 701, Communicating Key Audit Matters in the Independent Auditor’s Report.

Auditor reporting FAQs

The NZAuASB approved additional questions to be added to the website dealing with:

  • Key audit matters and subsequent events;
  • the communication of a key audit matter and/or an emphasis of matter; and
  • whether the Director’s Report is 'Other information'.  

Find these FAQs on the XRB website

Examination of prospective information

The NZAuASB approved a project plan to develop an assurance standard on prospective financial information.

This project is being undertaken in response to an increased demand for assurance over prospective financial information. There is currently no standard on prospective financial information in the New Zealand suite of standards.

The standard will be developed in accordance with due process for domestic standards and in collaboration with the AUASB as appropriate. It is anticipated that it will take about 15 months to develop and finalise the standard.  

Guidance for prescribers

The NZAuASB provided feedback on a draft of guidance being developed for prescribers of assurance engagements, for example, policy makers and regulatory supervisors.

The objective of the guidance is to clarify the correct terms to use when setting assurance requirements in accordance with the NZAuASB standards.

The guidance is expected to be issued by the end of the year.

Outreach on the audit of service performance information

The NZAuASB considered the proposed agenda and break-out discussions for the upcoming roundtable discussions on ED NZAuASB 2017-2 New Zealand Auditing Standard xx The Audit of Service Performance Information.

You can still register for the roundtable discussions being held in Auckland, Wellington and Christchurch in November. 

You can view a recording of the webinar and presentation slides on the XRB website

Next meeting

13 December 2017