NEW YORK - In an era where technology is rapidly transforming the landscape of external reporting, the International Auditing and Assurance Standards Board (IAASB) reaffirmed its commitment to staying at the forefront of these changes with the adoption of a comprehensive Technology Position Statement.
This Position Statement outlines how the IAASB will integrate technological ad-vancements into its standard-setting activities to ensure that its standards remain relevant, effective, and aligned with the public interest. It also clarifies the IAASB’s new position, which includes:
•Embracing innovation in audit and assurance while ensuring that its standards evolve with the changing environment.
•Removing barriers in existing standards that may prevent using advanced technologies.
•Introducing new requirements and guidance to help practitioners apply tech-nology-enabled procedures effectively.
A Three-Component Framework for Technology Integration
The IAASB's Technology Position is built on a conceptual framework composed of three key components:
1.Technology Position Statement: This core section details the IAASB's over-arching stance on the role of technology in audit and assurance practices. It emphasizes the transformative potential of technology in enhancing audit and assurance quality and includes eight actions that the IAASB will take to deliv-er on its commitment to facilitate and encourage firms and practitioners to use technology.
2.Approach to Operationalizing the Technology Position Statement: The sec-ond component of the framework explains how the IAASB will put the Tech-nology Position Statement into action. This includes identifying opportunities for standard-setting and developing non-authoritative materials, all in close consultation with key stakeholders.
3.Approach to Monitoring and Adapting the Technology Position: Recogniz-ing the fast-paced evolution of technology, the IAASB will proactively moni-tor technological trends and adapt its Technology Position as needed. This en-sures the framework remains effective and relevant in a rapidly changing envi-ronment.
Commitment to the Public Interest and Enhancing Engagement Quality
The IAASB's Technology Position Statement underscores its commitment to the public interest by focusing on enabling consistently high-quality engagements. As technology becomes increasingly pervasive in all aspects of external reporting, the IAASB has a crucial role in improving audit and assurance quality. The Statement highlights the IAASB’s dedication to developing standards that facilitate and, where appropriate, encourage firms and practitioners to use technology.
IAASB’s Actions to Navigate the Technological Landscape
The Statement includes eight key actions detailing how the IAASB will deliver on its new technological commitment:
1.Embrace Technology-Driven Innovations
2.Remove Barriers in the Standards, Real or Perceived, to Practitioners Using Technology
3.Introduce Requirements and Application Material Relating to Using Technol-ogy in Engagements
4.Address the Impact of Technology Used by Reporting Entities
5.Strike the Right Balance When Referring to Opportunities and Risks Associ-ated with Technology
6.Align with Principles of Ethics and Ethical Requirements
7.Ensure Scalability and Proportionality
8.Convene Stakeholders and Foster Ongoing Engagement
Operationalizing the Technology Position
To turn its Technology Position into actionable outcomes, the IAASB is conduct-ing a gap analysis, beginning with a review of its foundational standards: the In-ternational Standards on Quality Management and International Standards on Auditing. This analysis will identify potential areas for the IAASB to enhance the standards to better facilitate technological adoption. The findings will inform the IAASB's future work plans. Future work could include opportunities for new standards or revisions to existing ones as well as developing non-authoritative materials, all in close consultation with key stakeholders.
The IAASB is also developing a feedback mechanism to allow stakeholders and partners to provide feedback and insights, including any challenges they encoun-ter when using existing standards and materials.
Ongoing Monitoring and Adaptation
The IAASB's approach to technology is dynamic, with a commitment to continu-ously monitoring the technological landscape. Through feedback from stakehold-ers and advisory groups, the IAASB will stay informed of emerging trends and adapt its standards and guidance as necessary. This proactive approach will help the IAASB maintain the relevance and effectiveness of its Technology Position in a rapidly changing environment.
https://www.iaasb.org/news-events/2024-10/iaasb-s-new-technology-position-8-actions-embrace-technology-and-innovation-0