Last year’s publication of a revised SA 240 ‘Quality control for audit work’ and an exposure draft on SAS 610 ‘Communication with directors’, uniquely for quoted companies, has led to worries over the future harmonisation process.
The Association of Chartered Certified Accountants has criticised the APB for what it sees as the development of one set of rules for listed companies and one set for non-listed without extensive consultation.
Jonathan Beckerlegge, chairman of ACCA’s Auditing Committee, said: ‘We are concerned that the APB may be committed to introducing into the UK what amounts to big Generally Accepted Auditing Standards and small Generally Accepted Auditing Standards without appropriate consultation. In doing so it stifles debate on a topic which is itself much more important than the proposed change to SAS 610. We urge the APB to widen the debate by inviting comment on this specific issue.’
Jon Grant, technical director of the APB, countered the criticism: ‘Our goal is to develop auditing standards that are appropriate to entities of all sizes. However, we also need to ensure that our standards are cost-effective.
‘Sometimes this can result in a tension. And in rare cases we have introduced standards that we think are necessary for larger public interest entities, but which we think would be a burden for smaller entities.’
ACCA went a step further in its criticism by calling the UK watchdog insular in its approach to adopting International Standards of Auditing.
In its newest proposals, ACCA claims, the APB has departed significantly from ISA 260.
‘With the likely convergence of auditing standards in Europe to International Standards on Auditing during this decade, it is now imperative for the APB to do everything in its power to promote a smooth transition. Unnecessary departures from international standards such as we see in the SAS 610 case do not greatly assist the convergence process,’ said Beckerlegge.
Last September’s revised SAS 240 will force auditors to comply with an extra round of internal analysis and independent reviews on all audits of UK quoted companies. The exposure draft on revisions to SAS 610 also issued in September aims to close the gap between directors and audit partners. The revised document proposes to extend communication with audit committees of listed companies concerning auditor independence and objectivity. The consultation period on SAS 610 closed on 15 December 2000.
For details on APB standards and exposure drafts visit www.apb.org.uk.
The ACCA website can be accessed on www.accaglobal.com.