The AICPA’s Auditing Standards Board released a proposal redrafting Statement on Auditing Standards (SAS) no. 39, Audit Sampling (AICPA, Professional Standards, vol. 1, AU sec. 350), according to the board’s clarity drafting conventions and to converge with International Standard on Auditing (ISA) no. 530 (Redrafted), Audit Sampling.
While the proposal doesn’t change SAS 39 significantly, according to the ASB, the board is asking for feedback on matters such as whether the proposed SAS should expand on the application guidance of random- based methods to specifically address, for example, block sampling when it is designed to be considered a random-based selection. The ASB decided not to include block sampling as a selection technique in the proposed SAS because selection techniques are addressed more extensively, and in their proper context, in the AICPA Audit Guide Audit Sampling. Comments are due May 29. The proposal is available at tinyurl.com/c28c5r.
As part of its clarity project, the ASB also released proposed Statement on Auditing Standards (SAS), Initial Audit Engagements, Including Reaudits—Opening Balances. The proposal would supersede SAS no. 84, Communications Between Predecessor and Successor Auditors (AICPA, Professional Standards, vol. 1, AU sec. 315). The proposal is available at tinyurl.com/ca4msm.
The International Auditing and Assurance Standards Board (IAASB) completed its clarity project, an initiative to update and reposition auditing standards in a form that is easier to understand, implement and translate. The clarified standards are effective for audits of financial statements for periods beginning on or after Dec. 15, 2009.
The project closed with the release of the final seven clarified International Standards on Auditing (ISAs). In all, the project gives auditors access to 36 clarified ISAs and a clarified International Standard on Quality Control. The standards are available in a new Clarity Center on the IAASB Web site at www.ifac.org/IAASB.
The IAASB is an independent standard-setting board within the International Federation of Accountants (IFAC). “We anticipate that the completion of the clarity project will bring further momentum to the convergence process,” Jim Sylph, IFAC’s executive director, professional standards, said in a press release.
The PCAOB announced March 16 that it was seeking SEC approval to raise the 2009 accounting support fee from $151.8 million to $157.4 million. The increase would be a 3.7% hike from the fee the SEC approved in December. The additional funds would be held in reserve until the PCAOB and the SEC have approved a supplemental PCAOB budget.
The PCAOB warned in a letter to the SEC that its normally high collection rate may dip given the flagging economy. The board also wants to consider whether to submit to the SEC a supplemental budget request to implement any new legislation related to oversight of nonpublic broker-dealer auditors, should the PCAOB gain such authority. Separately, the board was mulling a supplemental request to strengthen the PCAOB’s non-U.S. inspections program; enhance documentation of planning and fieldwork of inspections; and enhance the PCAOB’s enforcement resources.
The PCAOB sought comments for a second time on an auditing standard on Engagement Quality Review (EQR). The board first proposed a new standard on EQR on Feb. 26, 2008. The board has since made extensive changes to the original proposal and is now seeking comment on the revised EQR standard. The proposal would supersede the board’s quality control standard, SECPS Requirements of Membership, Section 1000.08(f).
The proposed standard would apply to all audit engagements and engagements to review interim financial information conducted pursuant to the standards of the PCAOB. It provides a framework for an engagement quality reviewer to objectively evaluate the significant judgments made by the engagement team and the conclusions reached in forming an overall conclusion on the engagement.
“This proposed EQR standard focuses the engagement quality reviewer’s attention on those matters that increase the likelihood of identifying and correcting significant engagement deficiencies before the audit report is issued,” PCAOB Chairman Mark W. Olson said in a press release. Comments on the proposal, available at tinyurl.com/dy9mkh, were due April 20.