BACKGROUND TO THE CLARITY PROJECT OF IAASB

In 2004, the IAASB began a comprehensive programme to enhance the clarity of its International Standards on Auditing (ISAs). The broad aim of the project was to enhance the understandability of the ISAs, which should encourage consistent application and lead to an improvement in audit quality worldwide. In addition to this enhanced understandability, many of the ISAs have been revised, resulting in substantive changes to the contents of the ISAs. A summary of the changes introduced by the Clarity Project are as follows: 19 ISAs and ISQC 1 have been redrafted to apply the new Clarity conventions and format (see discussion below) – these are referred to as ‘Redrafted ISAs’ 16 ISAs contain new and revised requirements, in addition to being redrafted to apply the new Clarity conventions and format these are referred to as ‘Revised and Redrafted ISAs. A standard has been issued on a new topic ISA 265 Communicating Deficiencies in Internal Control to Those Charged with Governance and Management.  While we've all been focused on the desperate tactics of the IASB to shove IFRS down everyone's throats and make it seem way cooler than lame old GAAP, the AICPA Auditing Standards Board (ASB) has been quietly aligning its agenda with that of the International Auditing and Assurance Standard Board (IAASB). Dubbed The Clarity Project, the goal was to converge U.S. GAAS and international standards on auditing (ISAs) in the first total recodification of GAAS since 1972.  The ASB's clarified auditing standards are effective for periods beginning after December 15, 2012 which means they will be eligible to be tested on the CPA exam as early as July 2013.  What this means for current and soon-to-be CPA exam candidates is that you should probably aim to get Audit out of the way before the new standards show up just to save yourself some study time.  According to Dr. Bill Hillison, Professor Emeritus of Accounting at Florida State University and co-author of Gleim CPA Review Auditing materials, “The AICPA’s Auditing Standards Board redrafted its standards into a new Codification of Statements on Auditing Standards to make U.S. Generally Accepted Auditing Standards (GAAS) easier to read, understand, and apply. A goal of the ASB was to converge the standards with the International Standards of Auditing (ISA) and to eliminate the duplication that existed in the current standards.”  “It's not as bad as it looks,” says Dr. Hillison. “While there are some areas that dramatically changed, many of the standards remain basically the same conceptually.”