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ISA 315 Overview – Spectrum of Inherent Risk

The fourth concept recognised in the new ISA 315 (paragraph 5) builds on the emphasis on inherent risk (IR) discussed in the last article and the need for a separate assessment of inherent risk and control risk. ISA 200 tells us that inherent risk is higher for some assertions and related classes of transactions, account […]

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Updates to financial reporting and auditing thresholds

From January 2022 the thresholds at which New Zealand financial reporting requirements are allowed, and to the levels under which audits and review engagements are required, have been updated. Let’s consider New Zealand’s reporting landscape while considering the changes. A variety of reporting levels Think of the reporting framework as a tree with two main […]

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Agreed Upon Procedures – Understanding ISRS (NZ) 4400

Why a new standard? A wide range of stakeholders use Agreed-Upon Procedure (AUP) reports for various reasons. The demand for AUP engagements continues to grow, particularly with the need for increased accountability around funding and grants. In addition, regulation changes have also driven increased demand for AUP engagements, especially from smaller entities, as increased audit […]

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New Quality Standards: ISQM 2 Explained

Why there is a need for yet another quality standard? This one specifically addresses the Engagement Quality Reviewer; their appointment, eligibility, responsibilities, and documentation. This standard aims to strengthen the requirements for engagements that should be subject to an engagement quality review by extending the requirement for an Engagement Quality Review (EQR) to engagements other […]

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Summary of Upcoming LCE Standard

The IAASB has now issued its proposed standard on less complex entities (ED-ISA for LCE) for feedback. A standard around LCE’s is long overdue, and their proposal comes with the hope of easing unnecessary requirements placed on auditors. The standard is expected to come into effect around 2023/2024 and should be a game-changer for the […]

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New Quality Standards: An Outline of the new ISA (NZ) 220

The new ISA 220 will be effective from December 2022, which means that firm’s have plenty of time to get up to speed with the changes. The standard emphasis can be summarised with: Proactive management of quality at the engagement level by emphasising the importance of professional scepticism. Enhancing the auditor’s documentation’s judgments. Reinforcing the […]

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Auditing the COVID wage subsidy

I have spoken to a couple of users lately regarding potential fishhooks related to the audit of the COVID 19 wage subsidies paid out by the Ministry of Social Development (MSD). What is our responsibility as auditors? Do we just accept that if the subsidy was received it was legitimate? What if we find that […]

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