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Chapter 2

Professional standards

IFAC promotes international regulation of the accountancy profession.

One of the subsidiary boards of IFAC is the International Audit and Assurance
Standards Board (IAASB).

It is their responsibility to develop and promote International Standards on Auditing
(ISAs).

 ISAs are professional guidance that auditors must follow to ensure each audit is
performed consistently and to a required standard of quality.

 ISAs are not legal requirements. If a country has a law in place which is
inconsistent with the requirements of the ISAs, local law should be followed.

 ISAs are written in the context of an audit of the financial statements but can be
applied to the audit of other historical financial information.

 ISAs must be applied in all but exceptional cases. Where the auditor deems it
necessary to depart from an ISA to achieve the overall aim of the audit, this
departure must be justified.

National standard setters

 May develop their own auditing standards and ethical standards

 May adopt and implement ISAs, possibly after modifying them to suit national
needs.

In the event of a conflict between the two sets of guidance, local regulations will
apply.

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