Auditing


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More than three-quarters (78%) of audit committee members who participated in a recent survey commissioned by the Center for Audit Quality rated overall audit quality “very good” or “excellent,” and 82% said it has improved in recent years.

About 53% of the audit committee members agreed that overall audit quality is “very good,” while 25% described it as “excellent.” About 87% said the risk of inaccuracies in financial statements due to fraud is “not very high,” and 60% agreed that the risk declined after the passage of the Sarbanes-Oxley Act.

Nearly two-thirds (65%) agreed that investors should have more confidence in the markets as a result of the 2002 law.

The Internet survey of 253 audit committee members was conducted between Jan. 7 and Feb. 20 by The Glover Park Group. Participants in the survey represented a range of publicly traded companies. All served on at least one audit committee in 2007. Six in 10 served on two or more audit committees, and half were committee chairs. About 56% began their service as audit committee members prior to the passage of SOX.

Nearly all of the respondents (99%) said they devote more time to their committee work as a result of SOX. About 90% said they work more closely with external auditors.

The audit committee members expressed mixed views on the efficacy of audited financial statements filed with the SEC. Although most described financial statements as “easily accessible” (81%) and “relevant to investors” (87%), 78% said they are too complicated.

The survey questionnaire and results are posted on the CAQ’s Web site, www.thecaq.org.

The PCAOB announced the 2008 series of its Forums on Auditing in the Small Business Environment. The agenda will include a discussion of practical quality control policies and procedures and evolving accounting and auditing issues. The discussions also will address the application of certain auditing standards, observations from the board’s disciplinary orders, and discussion of implementation of Auditing Standard no. 5, An Audit of Internal Control Over Financial Reporting That Is Integrated with An Audit of Financial Statements.

In Chicago and Philadelphia, directors and financial executive officers of small and medium public companies will be invited to participate in a separate event the following day that will address PCAOB issues affecting smaller public companies.

Each free program is open to PCAOB–registered firms and the smaller public companies audited by those firms. Attendees earn CPE credits. The 2008 series began April 28 in Santa Monica, Calif., and continues as follows:

San Francisco–June 3

Dallas–June 24

Chicago–Sept. 30 to Oct. 1

Philadelphia–Oct. 29 to 30

Fort Lauderdale, Fla.–Nov. 17

New York–Jan. 13, 2009

More information, including the forum agenda and registration information, is available at www.pcaobus.org .

The AICPA’s Audit and Attest Standards Team issued five technical practice aids (TPAs 8200.05–.09) containing technical questions and answers developed in response to common questions received from members regarding the implementation of Statement on Auditing Standards (SAS) nos. 104–111, also referred to as “The Risk Assessment Standards.”

Additionally, TPA 9120.08 has been developed to address the implications on the principal auditor’s report when part of an audit is conducted by other independent auditors in accordance with International Standards on Auditing or another country’s auditing standards.

The TPAs are available at www.aicpa.org/Professional %20Resources/Accounting%20and%20Auditing/Audit%20 and%20Attest%20Standards/Practice%20Aids%20and%20 Tools/Recently%20Issued%20Technical%20Practice%20 Aids.htm .

 

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