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Audit Evidence Bob Dohrer, Technology Working Group Chair and Audit Evidence Working Group Chair IAASB CAG Meeting, New York Agenda Item D March 5, 2019
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History of the IAASB’s Work on Technology and Data Analytics
Technology and its implications for audit and assurance is a key focus for the IAASB Data Analytics Working Group established in 2015 Project Advisory Panel Consultation Paper issued in 2016: Inform stakeholders about the IAASB’s ongoing work on technology, with a focus on data analytics, in an audit of financial statements Obtain input on whether all of the considerations on the use of data analytics have been identified Feedback Statement issued 2018 Video on the IAASB’s work on data analytics is available at
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Technology: The Way Forward
Initial work focused on data analytics, but the topic is broader and encompasses: The automation of audit and assurance tasks Management’s or the practitioner’s use of blockchain, artificial intelligence (AI) Technology-enabled remote audit and assurance work Terms of Reference to be agreed for Technology Working Group Communiqués to be issued to provide update on the how technology is being incorporated into the IAASB’s current projects ED-ISA 315 (Revised) – use of automated tools and techniques ED-ISQM 1 and ED-ISA 220 – use of technological resources ISA 500 – implications of technology in obtaining and assessing audit evidence
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Technology and Audit Evidence Working Groups
Data Analytics Working Group Audit Evidence Working Group (New) Emerging Technology Working Group Bob Dohrer - Chair of both WGs
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ISA post- implementation review
Audit Evidence: What is Driving the Need for Change? ISA post- implementation review Professional skepticism Technology AI, robotics, blockchain, cloud computing, social networks and new digital currencies and payment platforms How audits are performed (use of automated tools and techniques, such as data analytics, robotics and AI) The audit environment Corporate failures Poor results of external inspections
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Audit Evidence: What are the Areas that may Need to be Considered?
Is the objective of the standard still appropriate? Important relationships to other standards (ISA 200, ISA 315 (Revised) and ISA 330) How does information obtained through emerging audit techniques fit within the audit evidence model (i.e., tests of controls, substantive procedures, inspection, observation, inquiry etc.) Is the definition of sufficient appropriate audit evidence still appropriate? Sufficiency currently focused on quantity Desire to incorporate concept of persuasiveness (professional skepticism) Embedding concepts to enhance professional skepticism Enhancing how the standard deals with contradictory evidence or obtaining evidence in an unbiased manner What affects the determination of whether sufficient appropriate audit evidence has been obtained? How does the nature, timing and extent of the audit procedures affect this determination?
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Audit Evidence: What are the Areas that may Need to be Considered?
Is the requirement addressing the relevance and reliability of information to be used as audit evidence still appropriate? Increasing availability of information, new sources of information, changes in how information is generated What other attributes should be considered (e.g., completeness and accuracy)? Are the requirements addressing selection of items for testing still appropriate given new audit techniques? Is it still appropriate that the requirements dealing with management experts are located in ISA 500? Various areas in need of modernization – e.g.: Definition of accounting records Statements that are factually questionable (such as “reliability of audit evidence is increased when it is obtained from independent sources”) More examples that recognize emerging tools and techniques
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Audit Evidence: AICPA’s Audit Evidence Project Overall Objectives
The ways that business is transacted and reporting takes place has changed and thus information evaluated by the auditor is different than in the past. Address Evolving Nature Of Audit Services Emerging Tools And Techniques, Including Data Analytics Professional Skepticism External Information Sources
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Audit Evidence: AICPA’s Audit Evidence Project Attributes of Information
Attributes are considered in the context of other attributes
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Discuss Comment Letters
ED May 2019 Discuss Comment Letters October 2019 Final January 2020 Effective Date June 2021 Audit Evidence: AICPA’s Audit Evidence Project Timeline
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