ASB issues new standard

Rules will apply to audits of ICFR integrated with financial statement audits.

The AICPA Auditing Standards Board (ASB) issued a new standard to establish requirements and provide guidance that apply only when an auditor is engaged to perform an audit of internal control over financial reporting (ICFR) that is integrated with an audit of financial statements.

Statement on Auditing Standards No. 130, An Audit of Internal Control Over Financial Reporting That Is Integrated With an Audit of Financial Statements, takes effect for integrated audits for periods ending on or after Dec. 15, 2016.

The new standard states that although the objectives of an audit of ICFR and an audit of financial statements are not the same, the auditor should plan and perform the integrated audit to achieve the respective objectives simultaneously. Under the guidance, the auditor should design tests of controls:

  • To obtain sufficient appropriate audit evidence to support the auditor's opinion on ICFR as of the date specified in management's assessment of ICFR, and
  • To obtain sufficient appropriate audit evidence to support the auditor's control risk assessments for purposes of the audit of financial statements.

When the new standard takes effect, the ASB will withdraw Statement on Standards for Attestation Engagements No. 15, An Examination of an Entity's Internal Control Over Financial Reporting That Is Integrated With an Audit of Its Financial Statements. Also withdrawn will be a related attestation interpretation, "Reporting Under Section 112 of the Federal Deposit Insurance Corporation Improvement Act."

At the same time, amendments to various sections in SAS No. 122, Statements on Auditing Standards: Clarification and Recodification, will take effect.

At a later date, the ASB will consider developing an attestation standard addressing examinations of internal control other than ICFR that is integrated with an audit of financial statements.

SPONSORED REPORT

Revenue recognition: A complex effort

Implementing the new standard requires careful judgment. Learn how to make significant accounting judgments and document them and collaborate with peers for consistent application.

TECHNOLOGY Q&A

How to create maps in Excel 2016

Microsoft Excel 2016 has two new mapping capabilities. J. Carlton Collins, CPA, demonstrates how to make masterful 2D and 3D maps in Excel 2016.

QUIZ

News quiz: Economy and health care changes top CPAs’ list

CPA decision-makers’ economic outlook and the House Republicans’ proposed tax changes as part of replacing the Patient Protection and Affordable Care Act received attention recently. See how much you know with this short quiz.