In consultation with the Iranian Association of Certified Public Accountants (IACPA) and other regulatory bodies, the Islamic Republic of Iran Audit Organization (IRIAO) issues standards and guidelines on accounting, auditing, code of professional ethics and also code of ethics for personnel in accordance with Islamic rule. In a May 2007 self-assessment report prepared for the International Federation of Accountants (IFAC), the Iranian Institute of Certified Accountants (IICA) noted that the IRIAO had established convergence of national auditing standards with International Auditing and Assurance Board (IAASB) pronouncements as a formal objective. In 1998, thirty auditing standards based on the International Standards on Auditing (ISAs) were adopted with effective date of March 20, 1999. However, the IAASB revised the standards in 2004. To keep up with the revisions in ISAs, the IRIAO, according to Iran Daily 2005 article, prepared seven new standards and was in the process of revising existing standards.

General Overview

The Commercial code of 1932 requires listed and private companies to be audited in accordance with the Iranian Auditing Standards which, according to the Iran Daily 2005 article, are based on ISAs. The same report noted that in 1997 the Iranian government issued auditing guidelines which were analyzed by the industry experts. Subsequently, in 1998, thirty auditing standards based on the ISAs became effective as of March 20, 1999. However, the IAASB revised ISAs in the following years. According to the IRIAO website, as of August 2007, along with projects on Knowledge of business and its environment and risk assessments of material alternations and conceptual framework, projects specifically addressing requirements of ISA 402, 200 and 330 were also underway. In a May 2007 self-assessment report prepared for the IFAC, the IICA noted that the IRIAO had established convergence of national auditing standards with the IAASB pronouncements as a formal objective. According to the same self-assessment, the Central Bank of Iran regulates the banks and similar financial institutions. There are no special standards for auditing of banks. Banks are subject to the general auditing standards.

According to the Iran Daily report of 2005, in 1983, the Iranian government ratified an act to merge three audit companies (that were created after the Islamic revolution of 1979 to examine and audit the newly nationalized enterprises) - as one audit company: the IRAIO. The same report noted that the Audit Organization's by-laws were approved by the Parliament in 1987 and the organization was established as a legal entity, with financial independence. It was affiliated to the Ministry of Economy and Finance. The IAIRO's by-laws were further revised and approved by the Council of Ministers in 2003 to comply with Article 4 of the Third Economic, Social and Cultural Development Plan and the organization's legal status changed to State-Owned Limited Company.

In consultation with the IACPA and other regulatory bodies, the IRIAO issues standards and guidelines on accounting, auditing, code of professional ethics and also code of ethics for personnel in accordance with Islamic rule. As per the IRIAO website, the main objectives of the Audit Organization are: "(1) to provide government with basic needs in the field of auditing and specialized financial services for state owned and government supervised entities; (2) to set Accounting and Auditing Standards and Professional Ethics in compliance with Islamic Rules as well; and (3) research in scientific and practical methods of accounting to enhance accountancy compatible with country's needs."

As noted on the IFAC website, the IICA is a full member of the IFAC and the IACPA is an associate member.

The Principles

ISA 200 Objective and General Principles Governing an Audit of Financial Statements (effective 2006)

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There is insufficient publicly available information as to Iran's compliance with this principle.

ISA 210 Terms of Audit Engagements (effective 2006)

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There is insufficient publicly available information as to Iran's compliance with this principle.

ISA 220R Quality Control for Audits of Historical Financial Information (effective 2005)

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There is insufficient publicly available information as to Iran's compliance with this principle.

ISA 230R Documentation (effective 2006)

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There is insufficient publicly available information as to Iran's compliance with this principle.

ISA 240 The Auditor’s Responsibility to Consider Fraud in an Audit of Financial Statements (effective 2004)

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There is insufficient publicly available information as to Iran's compliance with this principle.

ISA 250 Consideration of Laws and Regulations in an Audit of Financial Statements (effective 2004)

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There is insufficient publicly available information as to Iran's compliance with this principle.

ISA 260 Communications of Audit Matters With Those Charged With Governance (effective 2004)

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There is insufficient publicly available information as to Iran's compliance with this principle.

ISA 300 Planning an Audit of Financial Statements (effective 2004)

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There is insufficient publicly available information as to Iran's compliance with this principle.

ISA 315 Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement (effective 2004)

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There is insufficient information publicly available that directly addresses this principle

ISA 320 Audit Materiality (effective 2004)

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There is insufficient publicly available information as to Iran's compliance with this principle

ISA 330 The Auditor’s Procedures in Response to Assessed Risks (effective 2006)

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There is insufficient publicly available information as to Iran's compliance with this principle

ISA 402 Audit Considerations Relating to Entities Using Service Organizations (effective 2004)

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There is insufficient publicly available information as to Iran's compliance with this principle

ISA 500 Audit Evidence (effective 2004)

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There is insufficient publicly available information as to Iran's compliance with this principle

ISA 501 Audit Evidence - Additional Considerations for Specific Items (effective 2004)

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There is insufficient publicly available information as to Iran's compliance with this principle

ISA 505 External Confirmations (effective 2004)

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There is insufficient publicly available information as to Iran's compliance with this principle

ISA 510 Initial Engagements — Opening Balances (effective 2004)

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There is insufficient publicly available information as to Iran's compliance with this principle

ISA 520 Analytical Procedures (effective 2004)

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There is insufficient publicly available information as to Iran's compliance with this principle

ISA 530 Audit Sampling and Other Selective Testing Procedures (effective 2004)

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There is insufficient publicly available information as to Iran's compliance with this principle

ISA 540 Audit of Accounting Estimates (effective 2004)

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There is insufficient publicly available information as to Iran's compliance with this principle

ISA 545 Auditing Fair Value Measurements and Disclosures (effective 2004)

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There is insufficient publicly available information as to Iran's compliance with this principle

ISA 550 Related Parties (effective 2004)

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There is insufficient publicly available information as to Iran's compliance with this principle

ISA 560 Subsequent Events (effective 2006)

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There is insufficient publicly available information as to Iran's compliance with this principle

ISA 570 Going Concern (effective 2004)

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There is insufficient publicly available information as to Iran's compliance with this principle

ISA 580 Management Representations (effective 2004)

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There is insufficient publicly available information as to Iran's compliance with this principle

ISA 600 Using the Work of Another Auditor (effective)

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There is insufficient publicly available information as to Iran's compliance with this principle

ISA 610 Considering the Work of Internal Auditing (effective 2004)

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There is insufficient publicly available information as to Iran's compliance with this principle

ISA 620 Using the Work of an Expert (effective 2005)

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There is insufficient publicly available information as to Iran's compliance with this principle

ISA 700 The Auditor’s Report on Financial Statements (effective 2006)

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There is insufficient publicly available information as to Iran's compliance with this principle

ISA 701 Modifications to the Independent Auditor's Report (effective 2006)

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There is insufficient publicly available information as to Iran's compliance with this principle

ISA 710 Comparatives (effective 2004)

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There is insufficient publicly available information as to Iran's compliance with this principle

ISA 720 Other Information in Documents Containing Audited Financial Statements (effective 2004)

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There is insufficient publicly available information as to Iran's compliance with this principle

ISA 800 The Auditor’s Report on Special Purpose Audit Engagements (effective 2006)

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There is insufficient publicly available information as to Iran's compliance with this principle