CHAPTER 2 – EXTERNAL AUDIT
STANDARD SETTING BOARDS
IFAC has four standard-setting boards:
• IAAS
• IESBA
• IAESB
• IPSASB
IAASB
The International Auditing and Assurance Standards Board (IAASB) is an independent standard-setting body. It
serves the public interest by setting high-quality international standards for auditing, assurance, and other
related areas.
The objective of the IAASB is to improve the uniformity of auditing practices and related services throughout the
world by issuing pronouncements (e.g. ISAs) on audit and assurance functions and promoting their acceptance
worldwide.
IESBA
The International Ethics Standards Board for Accountants (IESBA) is an independent standard-setting body that
sets professional ethics standards, including auditor independence requirements.
The IESBA has two objectives:
• To develop guidance on professional ethics and promote its understanding and acceptance by
member bodies.
• To continually monitor ethical issues to ensure that IFAC's ethical guidance (issued by the IESBA)
is responsive to the expectations and challenges of individuals, businesses, financial institutions
and others relying on accountants' work.
IAESB
The objective of the International Accounting Education Standards Board (IAESB) is to develop guidance,
conduct research and facilitate the exchange of information to ensure that accountants are adequately trained
to meet their responsibilities.
2.3.4 IPSASB
The International Public Sector Accounting Standards Board (IPSASB) works to improve public sector financial
reporting worldwide by developing international accrual-based accounting standards for use by governments
and other public sector entities.
AA Short Notes by Basil Neelambra
RIGHTS AND DUTIES OF AUDITORS
Duties
Report to the company's shareholders on the financial statements
Report that:
i. proper accounting records have been kept;
ii. the auditor has received all necessary information and explanations; and
iii. the directors' report is consistent with the information contained in financial statements.
Rights
i. To have access to the books, accounts, and vouchers at all times.
ii. To require from company officers any information and explanations considered necessary for the
audit.
iii. To have unrestricted access to persons within the entity from whom the auditor determines it
necessary to obtain audit evidence.
iv. To receive notice of, attend and be heard at the general meeting of the company on business which
concerns them as an auditor (e.g. a resolution to remove them from office).
REMOVAL OF AUDITORS
Only the shareholders have the power to remove the auditor from office by passing ordinary resolution in a
general meeting of shareholders).
AA Short Notes by Basil Neelambra