Both national and international bodies produce or promulgate auditing standards. The examination requires knowledge of International Standards on Auditing (ISAs). ISAs are designed to be implemented internationally but there may be situations where a conflict may arise between an ISA and local audit requirements. National standard-setters are expected to aim for compatibility with ISAs as far as possible.
ISAs are produced the International Audit and Assurance Standards Board (IAASB), a committee of the International Federation of Accountants (IFAC). IFAC is an international organisation of professional accountancy bodies, including the ACCA.
Producing a new ISA
The process of producing an ISA is as follows:
The process of producing an ISA is as follows:
- A subject matter is chosen for detail analysis, study, with a view to eventually issuing an ISA.
- After a period of study and research, if there is agreement to proceed, anexposure draft is produced. The exposure draft is approved by the IAASB and then distributed widely amongst the profession and others for comment.
- Comments and proposed amendments are considered by the IAASB. The draft standard is then modified and approved by the IAASB.
- The new ISA is then published.