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     AUDITING

     IAASB STAFF ISSUES q&As TO GUIDE AUDITORS’ EFFECTIVE IMPLEMENTATION
     OF CLARIFIED ISAs; AND ADDRESSES SME ISSUES
                                                                                                       to as management commentary. The
                                                                                                       management commentary contextualises
     To assist auditors worldwide in implementing the clarified International Standards on
                                                                                                       the financial position, financial performance
     Auditing (ISAs), the staff of the International Auditing and Assurance Standards Board
                                                                                                       and cash flows of an entity, and provides
     (IAASB) has developed a new question and answer publication entitled Applying ISAs
                                                                                                       users of financial statements with the
     Proportionately with the Size and Complexity of an Entity. The publication is relevant in the
                                                                                                       opportunity to understand management’s
     context of any audit, but will be of particular help to those that audit, or oversee the audits
                                                                                                       objectives and its strategies for achieving
     of, small- and medium-sized entities (SMEs).
                                                                                                       those objectives. This exposure draft has
                                                                                                       been issued in South Africa as ED 264.
                                                 “SMEs are an important sector of national
                                                 economies and one that is sensitive to significant
                                                                                                       The guidance requires that an entity clearly
                                                 changes in standards,” emphasises James Gunn,
                                                                                                       identifies and distinguishes information
                                                 IAASB Technical Director. “This staff publication
                                                                                                       disclosed as a management commentary
                                                 highlights provisions within the ISAs that guide
                                                                                                       in its financial statements. Further, this
                                                 auditors in applying the requirements to audits of
                                                                                                       guidance can only be applied to financial
                                                 SMEs in an efficient and effective manner.”
                                                                                                       statements that have been prepared
                                                                                                       in accordance with IFRSs and will be
                                                 The questions and answers explain how the
                                                                                                       issued as a non-mandatory guidance. The
                                                 design of ISAs enables them to be applied in
                                                                                                       disclosures made should be governed
                                                 a manner that is proportionate to the specific
                                                 characteristics of the entity subject to audit.       by the qualitative characteristics and
                                                 Furthermore, answers are given to questions           enhancing qualitative characteristics
                                                 relating to audit procedures, work effort,            of relevance, faithful presentation,
                                                 documentation and professional judgment.              comparability, verifiability, timeliness and
                                                                                                       understandability.
                                              Many of those with responsibility for financial
                                              statement audits are progressing their                   The deadline for comment to SAICA is
     consideration of implementation issues of the clarified ISAs. The publication is available for    1 February 2010. ED 264 -Management
14                                                                                                     Commentary can be downloaded from the
     download free of charge from the IFAC website (http://web.ifac.org/clarity-center/support-
     and-guidance).                                                                                    SAICA website.

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