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Ireland

International Standards on Auditing

Summary
The regulations of the Institute of Chartered Accountants in Ireland require auditors in Ireland to follow auditing standards issued by the UK Auditing Practices Board (APB). In December 2004, the APB issued International Standards on Auditing (ISAs) (UK and Ireland) effective for periods commencing on or after December 15, 2004. According to the APB, these national standards are ISAs as issued by the International Audit and Assurance Standards Board (IAASB). Where necessary, the APB has supplemented the international standards with additional standards and guidance. However, in 2005 the IAASB, in order to improve the clarity of the international standards, introduced the 'Clarity Project' which entailed revising/redrafting existing ISAs. The UK and Ireland, as members of the European Union (EU), also must comply with European Commission (EC) Directive 2006/43, which requires by June 29, 2008, all statutory audits to be carried out on the basis of ISAs as adopted by the EC. Per the APB 2006/07 Final Work Program, the APB would not change its existing ISAs (UK and Ireland) until the finalization of the Clarity Project. In the interim, it will continue to work with the IAASB on revising and redrafting the ISAs and on the EU adoption process for member countries.

    General Overview

    The 2005 self-assessment prepared by the Institute of Chartered Accountants in Ireland (ICAI) provides information on the regulatory and standard-setting framework for auditing in Ireland. According to the self-assessment, the legal framework for Irish financial reporting requirements is based on the Companies Act of 1963-2003 which covers listed, private and not-for-profit companies. The Companies (Auditing and Accounting) Act of 2003, Financial Reporting - Companies (Amendment) Act of 1986 and the Listing Rules of the Irish Stock Exchange supplement the Companies Act in regulating financial reporting requirements for different types of companies. The Companies Act also specifies the rules for accounting disclosures by Irish companies and covers listed, private and not-for-profit companies.
    The Irish Financial Services Reporting Authority (IFSRA) is the main regulator for all financial services firms in Ireland. It regulates the securities market, banks, non-banking financial institutions and the insurance sector as well. According to the 2005 ICAI self-assessment, "the IFSRA monitors and enforces regulatory reporting requirements. It has no role in monitoring or enforcing financial reporting or auditing standards." As part of its banking supervision the IFSRA may review audited financial statements of regulated entities to assess compliance with IFSRA rules. Non-compliance with regulatory requirements can lead to fines, suspension of licenses and criminal prosecution.
    Empowered by the Companies (Auditing and Accounting) Act of 2003, the Irish Auditing and Accountancy Supervisory Authority (IAASA) is responsible for the regulatory oversight of the accounting and auditing profession. Per the 2005 ICAI self-assessment, IAASA's main functions include supervision of professional accounting bodies, promotion of high quality professional standards, monitoring accounts of certain types of companies for compliance with the Companies Act requirements, and advising the Minister for Enterprise, Trade and Employment on auditing and accounting matters.
    As specified in the ICAI regulations, auditors in Ireland are required to follow auditing standards issued by the UK Auditing Practices Board (APB). This requirement is likely to be changed once the revised Eights Directive has been implemented (ICAI 2006). The APB was established in 2002 and is the auditing standard-setter both for the UK and Ireland. As the national standard-setter, the APB announced its intention to replace Statements of Auditing Standards (SASs) with International Standards on Auditing (ISAs) (UK and Ireland) on May 6, 2004. From June to October 2004, the APB issued exposure drafts of the proposed new standards, supplemented with additional standards and guidance where necessary. In December 2004, the APB released ISAs (UK and Ireland) of the same titles as ISAs issued by the International Audit and Assurance Standards Board (IAASB). However, in 2005 the IAASB introduced the Clarity Project to improve the clarity of ISAs in use. Consequently, the APB decided not to change its existing standards until the finalization of IAASB's Clarity Project. In the interim, it will contribute to IAASB's work on the revision and redrafting of ISA's.
    As a member of the European Union (EU), Ireland must also adhere to European Commission (EC) directives, including Directive 2006/43, which requires all statutory audits to be carried out on the basis of ISAs as adopted by the EC. The Directive aims at high-level -- though not full -- harmonization of statutory audit requirements. EU member states shall adopt and publish the provisions necessary to comply with the Directive before June 29, 2008. According to the Directive, in order to achieve a maximum degree of harmonization, member states should be allowed to impose additional national audit procedures or requirements only if these stem from specific national legal requirements relating to the scope of the statutory audit of annual or consolidated accounts -- in other words, only if those requirements have not been covered by the adopted ISAs. The ongoing adoption of ISAs in the EU is another reason why the APB decided not to change the existing ISAs (UK and Ireland).
    According to the 2006 ICAI self-assessment, "Until the middle of 2006 the ICAI developed its own ethical Code which complied with the requirements of the International Federation of Accountants (IFAC) Code" (p. 54). Beginning on July 1, 2006, this was supplanted by a new Code of Ethics that substantially adopted the IFAC Code, albeit with certain modifications. The ICAI, the Institute of Certified Public Accountants in Ireland, and the Institute of Accounting Technicians in Ireland (IATI) are listed as members on the IFAC website.


    The Principles

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

    According to ISA 200 (UK and Ireland) Objective and General Principles Governing an Audit of Financial Statements, this standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after December 15, 2004. According to ISA 200 (UK and Ireland) at the time of issuance, ISAs of the same titles issued by the IAASB were adopted as ISAs (UK and Ireland). However, subsequently the IAASB revised ISA 700, which gave conforming amendments to ISA 200. As indicated in the text of ISA 200 (UK and Ireland), these changes have not been incorporated into ISA 200 (UK and Ireland).

    ISA 210 Terms of Audit Engagements (effective 2006)

    According to ISA 210 (UK and Ireland) Terms of Audit Engagements, this standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after December 15, 2004. According to ISA 210 (UK and Ireland) at the time of issuance, ISAs of the same titles issued by the IAASB were adopted as ISAs (UK and Ireland).

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

    According to the revised ISA 220(UK and Ireland) Quality Control for Audits of Historical Financial Information, this standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after June 15, 2005. At the time of issuance, the ISAs (UK and Ireland) were based on ISAs of the same titles issued by the IAASB.

    ISA 230R Documentation (effective 2006)

    According to ISA 230 (UK and Ireland) Audit Documentation, this standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after December 15, 2004. According to ISA 230 (UK and Ireland) at the time of issuance, ISAs of the same titles issued by the IAASB were adopted as ISAs (UK and Ireland).However, subsequently the IAASB revised ISA 230 and according to a January 2006 press release issued by the APB the revised ISA (UK and Ireland) adopted the text of the revised ISA issued by the IAASB with the same effective date of June 2006.

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

    According to ISA 240 (UK and Ireland) The Auditor's Responsibility to Consider Fraud in an Audit of Financial Statements, this standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after December 15, 2004. According to ISA 240 (UK and Ireland) at the time of issuance, ISAs of the same titles issued by the IAASB were adopted as ISAs (UK and Ireland).

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

    According to ISA 250 Consideration of Laws and Regulations in an Audit of Financial Statements, this standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after December 15, 2004. According to ISA 250 (UK and Ireland) at the time of issuance, ISAs of the same titles issued by the IAASB were adopted as ISAs (UK and Ireland).

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

    According to ISA 260 (UK and Ireland) Communications of Audit Matters With Those Charged With Governance, this standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after December 15, 2004. According to ISA 260 (UK and Ireland) at the time of issuance, ISAs of the same titles issued by the IAASB were adopted as ISAs (UK and Ireland).

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

    According to ISA 300 (UK and Ireland) Planning an Audit of Financial Statements, this standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after December 15, 2004. According to ISA 300 (UK and Ireland) at the time of issuance, ISAs of the same titles issued by the IAASB were adopted as ISAs (UK and Ireland).

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

    According to ISA 315(UK and Ireland) Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement, this standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after December 15, 2004. According to ISA 315 (UK and Ireland) at the time of issuance, ISAs of the same titles issued by the IAASB were adopted as ISAs (UK and Ireland).

    ISA 320 Audit Materiality (effective 2004)

    According to ISA 320 (UK and Ireland) Audit Materiality, this standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after December 15, 2004. According to ISA 320 (UK and Ireland) at the time of issuance, ISAs of the same titles issued by the IAASB were adopted as ISAs (UK and Ireland).

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

    According to ISA 330 (UK and Ireland) The Auditor's Procedures in Response to Assessed Risks, this standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after December 15, 2004. According to ISA 330 (UK and Ireland) at the time of issuance, ISAs of the same titles issued by the IAASB were adopted as ISAs (UK and Ireland).

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

    According to ISA 402(UK and Ireland) Audit Considerations Relating to Entities Using Service Organizations, this standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after December 15, 2004. According to ISA 402 (UK and Ireland) at the time of issuance, ISAs of the same titles issued by the IAASB were adopted as ISAs (UK and Ireland).

    ISA 500 Audit Evidence (effective 2004)

    According to ISA 500 (UK and Ireland) Audit Evidence, this standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after December 15, 2004. According to ISA 500 (UK and Ireland) at the time of issuance, ISAs of the same titles issued by the IAASB were adopted as ISAs (UK and Ireland).

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

    According to ISA 501(UK and Ireland) Audit Evidence - Additional Considerations for Specific Items, this standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after December 15, 2004. According to ISA 501 (UK and Ireland) at the time of issuance, ISAs of the same titles issued by the IAASB were adopted as ISAs (UK and Ireland).

    ISA 505 External Confirmations (effective 2004)

    According to ISA 505(UK and Ireland) External Confirmations, this standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after December 15, 2004. According to ISA 505 (UK and Ireland) at the time of issuance, ISAs of the same titles issued by the IAASB were adopted as ISAs (UK and Ireland).

    ISA 510 Initial Engagements — Opening Balances (effective 2004)

    According to ISA 510 (UK and Ireland) Initial Engagements -- Opening Balances, this standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after December 15, 2004. According to ISA 510 (UK and Ireland) at the time of issuance, ISAs of the same titles issued by the IAASB were adopted as ISAs (UK and Ireland).

    ISA 520 Analytical Procedures (effective 2004)

    According to ISA 520 (UK and Ireland) Analytical Procedures, this standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after December 15, 2004. According to ISA 520 (UK and Ireland) at the time of issuance, ISAs of the same titles issued by the IAASB were adopted as ISAs (UK and Ireland).

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

    According to ISA 530(UK and Ireland) Audit Sampling and Other Selective Testing Procedures, this standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after December 15, 2004. According to ISA 530 (UK and Ireland) at the time of issuance, ISAs of the same titles issued by the IAASB were adopted as ISAs (UK and Ireland).

    ISA 540 Audit of Accounting Estimates (effective 2004)

    According to ISA 540 (UK and Ireland) Audit of Accounting Estimates, this standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after December 15, 2004. According to ISA 540 (UK and Ireland) at the time of issuance, ISAs of the same titles issued by the IAASB were adopted as ISAs (UK and Ireland).

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

    According to ISA 545 (UK and Ireland) Auditing Fair Value Measurements and Disclosures, this standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after December 15, 2004. According to ISA 545 (UK and Ireland) at the time of issuance, ISAs of the same titles issued by the IAASB were adopted as ISAs (UK and Ireland).

    ISA 550 Related Parties (effective 2004)

    According to ISA 550 Related Parties, this standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after December 15, 2004. According to ISA 550 (UK and Ireland) at the time of issuance, ISAs of the same titles issued by the IAASB were adopted as ISAs (UK and Ireland).

    ISA 560 Subsequent Events (effective 2006)

    According to ISA (UK and Ireland) 560 Subsequent Events, this standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after December 15, 2004. According to ISA 560 (UK and Ireland) at the time of issuance, ISAs of the same titles issued by the IAASB were adopted as ISAs (UK and Ireland). However, subsequently the IAASB revised ISA 560 which gave conforming amendments to ISA 700. According to an APB response to the IAASB proposal on ISA 560, the APB had not adopted the conforming amendments to ISA (UK and Ireland) 560 and 700.

    ISA 570 Going Concern (effective 2004)

    According to ISA 570 (UK and Ireland) Going Concern, this standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after December 15, 2004. According to ISA 570 (UK and Ireland) at the time of issuance, ISAs of the same titles issued by the IAASB were adopted as ISAs (UK and Ireland).

    ISA 580 Management Representations (effective 2004)

    According to ISA 580 (UK and Ireland) Management Representations, this standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after December 15, 2004. According to ISA 580 (UK and Ireland) at the time of issuance, ISAs of the same titles issued by the IAASB were adopted as ISAs (UK and Ireland).

    ISA 600 Using the Work of Another Auditor (effective)

    According to ISA 600 (UK and Ireland) Using the Work of Another Auditor, this standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after December 15, 2004. According to ISA 600 (UK and Ireland) at the time of issuance, ISAs of the same titles issued by the IAASB were adopted as ISAs (UK and Ireland).

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

    According to ISA 610 (UK and Ireland) Considering the Work of Internal Auditing, this standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after December 15, 2004. According to ISA 610 (UK and Ireland) at the time of issuance, ISAs of the same titles issued by the IAASB were adopted as ISAs (UK and Ireland).

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

    According to ISA 620 (UK and Ireland) Using the Work of an Expert, this standard was issued in June 2005 and is effective for audit of financial statements for periods commencing on or after June 15, 2005. According to ISA 620 (UK and Ireland) at the time of issuance, ISAs of the same titles issued by the IAASB were adopted as ISAs (UK and Ireland).

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

    ISA 700 (UK and Ireland), Independent Auditor's report on complete set of General Purpose Financial Statements, is a revised version of the previous ISA 700: Auditor's Report on Financial Statements (effective for periods on or after September 20, 2002). The present standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after December 15, 2004. However, subsequently the IAASB revised ISA 700. The APB issued an Exposure Draft (ED) in 2005 and decided that it would not adopt the revised ISA 700 at that time and that the current ISA (UK and Ireland) 700 would remain in place based on the previous ISA 700. In an August 2006 self-assessment report prepared for the IFAC, the Institute of Chartered Accountants in England and Wales noted that "the adoption of ISA 700 (Revised) has been deferred because of uncertainties over EC and other developments relating to audit reports" (p. 36).

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

    The APB issued an Exposure Draft ISA 701 (UK and Ireland) in July 2005 which adopted the text of ISA 701. However, according to the APB Final Work Program 2006/07, the approval of ISA 701 (UK and Ireland) has been deferred.

    ISA 710 Comparatives (effective 2004)

    According to ISA 710 (UK and Ireland) Comparatives, this standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after December 15, 2004. According to ISA 710 (UK and Ireland) at the time of issuance, ISAs of the same titles issued by the IAASB were adopted as ISAs (UK and Ireland).

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

    According to ISA 720 (UK and Ireland) Other Information in Documents Containing Audited Financial Statements, this standard was issued in December 2004 and is effective for audit of financial statements for periods commencing on or after December 15, 2004. According to ISA 720 (UK and Ireland) at the time of issuance, ISAs of the same titles issued by the IAASB were adopted as ISAs (UK and Ireland).

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

    The APB in its Final Work Program noted that it is in the process of gathering UK and Irish views on ED ISA 800 issued by the IAASB. According to an August 2007 APB press release, ISA 800 has not been adopted for use in the UK and Ireland due to the ongoing revision of ISA 800 by the IAASB.

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    Sources of Assessment

    Auditing Practices Board, "Auditing Practices Board Final Work Programme for 2006/7," June 2006. Available from Financial Reporting Council website. Accessed on October 21, 2007. (APB 2006)

    Auditing Practices Board website. Accessed on October 21, 2007. (APB website)

    Institute of Chartered Accountants in Ireland, "Response to the IFAC Part 2, SMO Self-Assessment Questionnaire," Self-assessment prepared as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, November 2006. Available from International Federation of Accountants website. Accessed on October 21, 2007. (ICAI 2006)

    Relevant Organizations

    Central Bank and Financial Services Authority of Ireland (CBFSAI)

    Committee of European Securities Regulators (CESR)

    Institute of Certified Public Accountants (ICPAI)

    Department of Enterprise, Trade and Employment (DETE)

    European Accounting Regulatory Committee (ARC)

    European Financial Reporting Advisory Group (EFRAG)

    Federation des Experts Comptables Europeens (FEE)

    Institute of Accounting Technicians in Ireland (IATI)

    Institute of Certified Public Accountants in Ireland (CPA)

    Institute of Chartered Accountants in Ireland (ICAI)

    Irish Auditing and Accounting Supervisory Authority (IAASA)

    Irish Financial Services Regulatory Authority (IFSRA)

    Irish Stock Exchange (ISE)

    United Kingdom Financial Reporting Council (FRC)

    United Kingdom Accounting Standards Board (ASB)

    United Kingdom Auditing Practices Board (APB)



    Relevant Legislation/Regulation

    Companies Acts, 1963-2006

    Companies Consolidation Act, 2007

    Companies (Auditing and Accounting) Act No. 44, 2003

    Listing Rules of the Irish Stock Exchange

    International Standards on Auditing (ISAs) (UK and Ireland)

    Exposure Drafts of ISAs (UK and Ireland)

    EU Auditing -Related Directives



    Supplementary Sources

    Institute of Chartered Accountants in Ireland, "Assessment of the Regulatory and Standard- Setting Framework," Self-assessment prepared as part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, February 2005. Available from International Federation of Accountants website. Accessed on October 21, 2007. (ICAI 2005)

    Institute of Chartered Accountants in Ireland (ICAI) website. Accessed on October 21, 2007. (ICAI 2005)

    International Federation of Accountants website. Accessed on October 21, 2007. (IFAC website)
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