International Auditing and Assurance Standards Board Presentation to the AAA Mid-Year Conference Clearwater, January 16, 2004

Setting Auditing Standards in the International Environment Who is IAASB?Who is IAASB? Liaison GroupsLiaison Groups AgendaAgenda TranslationTranslation ConvergenceConvergence

IAASB 18 Members18 Members –Ten put forward by Member Bodies –Five put forward by Forum of Firms –Three public members put forth by any individual or organization Each may appoint a technical advisorEach may appoint a technical advisor Two observers – Japanese FSA, PCAOBTwo observers – Japanese FSA, PCAOB Experienced in auditing and assurance services, academia, public and private sectors, governanceExperienced in auditing and assurance services, academia, public and private sectors, governance Five meetings annually (25 days)Five meetings annually (25 days) In 2003 – 87 additional Task force meetingsIn 2003 – 87 additional Task force meetings

IAASB Liaison Groups PIOB CAG IAASB PIOB CAG IAASB EC IOSCO SMP INTOSAI Academia MBs NSS TAC Public IFAC

Overall 2004 Timetable Considerations 30 June 2004 set as cut-off date for new and revised standards and guidance with 2005 effective dates30 June 2004 set as cut-off date for new and revised standards and guidance with 2005 effective dates Establishes body of auditing standards for adoption by EU in 2005Establishes body of auditing standards for adoption by EU in 2005 Standards issued after June 2004 to have 2006 effective datesStandards issued after June 2004 to have 2006 effective dates IAASB Project Timetable

February 2004February 2004 –Final Pronouncements ISQC 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, Other Assurance and Related Services EngagementsISQC 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, Other Assurance and Related Services Engagements ISA 220, Quality Control for Audits of Historical Financial InformationISA 220, Quality Control for Audits of Historical Financial Information ISA 240, The Auditors Responsibility to Consider Fraud in an Audit of Financial StatementsISA 240, The Auditors Responsibility to Consider Fraud in an Audit of Financial Statements ISA 300, Planning the AuditISA 300, Planning the Audit –Exposure Draft Policy, Convergence Policy, Convergence Planned Approvals

April 2004April 2004 –Final Pronouncement ISA, Review of Interim Financial Information Performed by the Auditor of the EntityISA, Review of Interim Financial Information Performed by the Auditor of the Entity June 2004June 2004 –Exposure Drafts ISA 540, Audit of Accounting EstimatesISA 540, Audit of Accounting Estimates ISA 320, MaterialityISA 320, Materiality ISA 230, DocumentationISA 230, Documentation Planned Approvals

September 2004September 2004 –Exposure Draft ISA 260, Communication with Those Charged With GovernanceISA 260, Communication with Those Charged With Governance –Final Pronouncements ISA 700, The Independent Auditors Report on a Complete Set of General Purpose Financial StatementsISA 700, The Independent Auditors Report on a Complete Set of General Purpose Financial Statements ISA 600, The Work of Related Auditors and Other Auditors in the Audit of Group Financial StatementsISA 600, The Work of Related Auditors and Other Auditors in the Audit of Group Financial Statements IAPS, The Audit of Group Financial StatementsIAPS, The Audit of Group Financial Statements Policy, ConvergencePolicy, Convergence Planned Approvals

December 2004December 2004 –Exposure Draft ISA 550, Related PartiesISA 550, Related Parties Planned Approvals

2004 Projects Under Development ISA701, Modifications to the Auditors ReportISA701, Modifications to the Auditors Report ISA 800, The Auditors Report on Special Purpose Audit EngagementsISA 800, The Auditors Report on Special Purpose Audit Engagements ISA, Management RepresentationsISA, Management Representations Clarity of IAASB StandardsClarity of IAASB Standards Comfort LettersComfort Letters Subject Matter Assurance Engagement Standards (to be determined and as resources permit)Subject Matter Assurance Engagement Standards (to be determined and as resources permit)

Translation Key wordsKey words Responsibilities of translating bodyResponsibilities of translating body Translation processTranslation process Effective dateEffective date

Convergence national standard setter that claims convergence national standard setter that claims convergence professional accountant who states in his/her report that an engagement was conducted in accordance with ISAsprofessional accountant who states in his/her report that an engagement was conducted in accordance with ISAs

International Auditing and Assurance Standards Board Presentation to the AAA Mid-Year Conference Clearwater, January 16, 2004