Question Tag: Clarity Project

In the audit of financial statements, auditors are required to comply fully with the International Standards on Auditing (ISAs). In general terms, the International Auditing and Assurance Standards Board (IAASB) takes the view that “an audit is an audit and should be conducted in line with the same auditing standards.” In 2009, IAASB issued a Q&A publication on matters relevant to the audit of SMEs—“applying ISAs proportionately with the size and complexity of an entity.”

Required:
Discuss the IAASB’s Clarity project on ISAs in relation to the audit of SMEs. (10 marks)