Independent auditors sometimes find themselves in conflict with regulator-prescribed forms.
In an emerging issue for auditors, some of them have found that the reports they are required to submit to state regulators do not contain the specific elements and wording of generally accepted auditing standards (GAAS) that state accountancy laws require auditors to follow.
The AICPA’s website is providing resources to help auditors find solutions to this issue. Many state regulators require that auditors provide an opinion on financial information to a regulator, often by means of an auditor’s report on forms prescribed by the regulator.
If the minimum required reporting elements and wording are not contained in the prescribed form, the auditor is required by GAAS to reword the prescribed form of the report or attach an appropriately worded separate report.
This issue first surfaced in New York with a form required by the New York City Tax Commission. The technical teams of the New York State Society of CPAs and the AICPA crafted a solution that allows auditors to meet the AICPA Auditing Standards Board’s new standards without requiring the City of New York to issue a new form.
This was accomplished when the commission agreed to accept either footnotes to the city’s form or a separate report attached to the form. Members who encounter this problem are encouraged to contact the AICPA or their state societies for assistance.
Please contact Ahava Goldman, AICPA senior technical manager (firstname.lastname@example.org or 212-596-6056), with questions.