On 1st April 2015 Poland adopted the International Standards on Auditing (further referred to as the ISAs). The ISAs are global standards to be followed by statutory auditors in carrying out auditing services and similar activities.
The ISAs will now have to be used by entities performing examinations and reviews of financial statements for Public Interest Companies covering periods ending on 31st December 2015 and later, while entities who do not perform examinations and reviews for Public Interest Companies will have to cover periods ending on 31st December 2017 and later.
Whereas some auditors (such as RSM and other networks) have been introducing the good practice of the ISAs for years, others will be forced to seriously adjust their approach to meet international standards.
Although the ISAs directly apply to statutory auditors, their implementation is also going to benefit entrepreneurs. Auditors who follow the ISAs should focus on understanding the organization, address significant risks threatening the enterprise and assess their impact on the financial statement. An audit should therefore serve organizations in identifying weaknesses with the help of an independent advisor who may see the business with new eyes.
For now the National Standards on Auditing have not been, in principle, conflicting with the ISAs, although the ISAs put greater emphasis on the necessity to adjust the audit to suit the needs and risks of clients. They also include more suggestions, descriptions of the state of affairs and recommendations on issues that still need to be addressed. For this reason the risk of auditors missing out on important procedures is definitely lower in case of examinations based on the ISAs.
Another advantage of having the ISAs introduced in Poland is better cohesion and harmonisation of auditing services in terms of international practice. This is especially important for groups who have their affiliated companies based in Poland.