PwC global network of firms believes that the time is right to significantly enhance auditor reporting. Valuable enhancements can be made now that move us some way to achieving the goal of more informative and valuable auditor reporting. As solutions are developed, it is critical that there be active, continuous and open dialogue amongst auditing standard setters, regulators, users and other stakeholders. PwC global network urges the IAASB to work in collaboration with the PCAOB in relation to their respective consultation papers to develop solutions that work globally.
PwC global network of firms believes that the proposed standard provides a strong basis for the performance of all assurance engagements and will facilitate consistent high quality engagements, capable of being supplemented by clearly tailored topic-specific ISAEs as required, in response to the needs of users. PwC global network also believes that the revisions to the requirements and application material to better articulate the defining characteristics of a limited assurance engagement, together with the principles and differences between attestation and direct engagements, are useful.
In developing the IAASB strategy and work program for 2012-2014, PwC reflected on a number of factors that the Firm believes need to be considered beyond the relative priorities of possible projects alone. A number of developments and events will have a direct bearing on the expectations of stakeholders of the IAASB's activities and the respective priorities of both ongoing and future projects. PwC believes the IAASB will need to be suitably flexible as the outcome of some of these factors is not yet determined and, once known, may impact decisions on which, and how many, projects should be undertaken.
PwC believes that the revision of extant ISRS 4410, and adoption of the clarity drafting guidelines, will serve to enhance understanding, of both users and practitioners, of the nature and scope of compilation engagements and of the distinguishing features of such engagements, as compared to other assurance type engagements. PwC supports the objective and overall work effort described in the proposed standard. The Firm also agrees with the principles on which the requirements, that describe the practitioner's work effort, are based.
PwC supports the proposed IAPS and its practical guidance given the prevalence of fair value accounting and the global economic environment, which continues to present challenges in the valuation of complex financial instruments and disclosures about risk and uncertainties. PwC supports the detailed audit considerations guidance in the proposed IAPS and believes that it will provide a useful source of guidance for those auditors with less experience in auditing complex financial instruments. PwC believes that there are some areas in the draft which interpret requirements and guidance in the ISAs in a manner that the firm is not convinced is appropriate, and could result in unnecessary work effort in some circumstances or may be...
PwC believes that the proposed revisions will prove beneficial to external auditors in: (1) explaining how the internal audit function can inform the external auditor's understanding of the entity and risk assessment; and (2) determining if, and when, it is appropriate for the external auditor to use the work of internal audit.
PwC is concerned that the emphasis in the proposed standard on the "process to compile" may result in users underestimating the applicability and usefulness of the standard, and the level of assurance that the work effort actually supports. The firm suggests that certain proposals within the exposure draft, along with the title of the standard, be amended to refer to the "proper compilation" of the pro forma information.