Subject to approval by the Securities and Exchange Commission, the Public Company Accounting Oversight Board adopted PCAOB Auditing Standard no. 3, Audit Documentation; an amendment to a related interim auditing standard on documentation; and two rules ( www.pcaobus.org/pcaob_news_2004-06-09.asp ). One rule sets forth the terminology the PCAOB will use to describe the degree of responsibility its auditing and related professional practice standards impose on auditors and the other relates to the oversight of non-U.S. public accounting firms ( www.pcaobus.org/pcaob_rulemaking.asp ).
The staff of the PCAOB issued a series of questions and answers relating to Auditing Standard no. 1, References in Auditors’ Reports to the Standards of the Public Company Accounting Oversight Board ( www.pcaobus.org/documents/Staff_Q_and_A/ ). The Q&A provides guidance for financial statement audits of nonissuers.
The auditing standards board (ASB) issued two interpretations of Statement on Auditing Standards (SAS) no. 58 , Reports on Audited Financial Statements . Interpretation 17 provides illustrative language in the auditor’s report to clarify that an audit performed in accordance with generally accepted auditing standards (GAAS) does not require the same level of testing and reporting on internal control over financial reporting as an audit of an issuer for whom section 404 of the Sarbanes-Oxley Act of 2002 is applicable. Interpretation 18 clarifies the applicability of GAAS and provides illustrative language for an audit conducted in accordance with both GAAS and PCAOB auditing standards. The interpretations are available at www.aicpa.org/members/div/auditstd . (See also Official Releases in the August issue of the JofA , page 92.
The Institute published a new edition of AICPA Professional Standards, which contains AICPA and PCAOB pronouncements issued through June 1, 2004. These include auditing guidance—GAAS for private-company audits and PCAOB standards for audits of public companies and certain other entities when prescribed by the rules of the SEC—as well as AICPA and PCAOB standards on professional ethics, independence and quality control relating to nonpublic and public entities. The volume (product no. 005104JA), which also identifies differences between the two bodies’ standards, is available at www.cpa2biz.com .