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ACCA Strategic Professional · Advanced Audit and Assurance (International) · International regulatory frameworks for audit and assurance services

Zephyr & Co, an audit firm, is asked by a client's finance director what the International Auditing and Assurance Standards Board (IAASB) does. Which statement correctly describes the IAASB's role?

The IAASB sets international standards for auditing, assurance and quality management, with its work overseen by the Public Interest Oversight Board. It does not discipline auditors, license firms or issue IFRS, which are handled by national bodies and the IASB respectively.

  1. AIt develops international standards on auditing, assurance and quality management under the oversight of the Public Interest Oversight BoardCorrect
  2. BIt enforces compliance with ISAs by disciplining individual auditors in every country
  3. CIt issues International Financial Reporting Standards for use by preparers
  4. DIt licenses audit firms to practise in each jurisdiction that adopts ISAs

Explanation

The IAASB is an independent standard-setting board that issues ISAs, ISQMs and other assurance standards, with its due process overseen by the Public Interest Oversight Board. It does not discipline auditors or license firms, which are national functions, and IFRS are issued by the IASB.

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