Auditing transition


With audit busy season ending, it’s time to start preparing for the transition to the clarified standards, which are effective for calendar year 2012 audits. A smooth transition requires information, education, and training. Take these steps to prepare for the clarified standards and minimize the transition’s effect on your firm and clients: 

  Familiarize yourself with the clarified standards, including the application material, appendices, and exhibits. The new format is clear, consistent, and easy to understand. Among other improvements, GAAS now specifies more clearly the objectives of the auditor and the requirements with which the auditor has to comply when conducting an audit. If your firm uses a commercially provided methodology, make sure you understand the new standards and how that methodology provider has implemented them. You may find more efficient and effective ways to comply with the standards than completing every step in a commercially available methodology. The clarified standards are available in the online version of the AICPA’s Professional Standards. For more information on resources on understanding and implementing the clarified SASs, go to in the AICPA’s Financial Reporting Center.

  Read the summary of changes between the clarified standards and the extant standards, which can be found in the brief Summary of Changes in Requirements Resulting From Issuance of Clarified SASs No. 117 Through No. 120 and No. 122 Through No. 125 (available at The ASB’s Clarity Project was not intended to create additional requirements, but some changes will require auditors to adjust their practices.

  Identify the timing for transitioning to the clarified standards for each engagement. For example, several new requirements may involve early planning discussions with the client; some may affect interim testing and other fieldwork; and some may require changes to the report. Your firm can take the following steps to implement the standards: (1) appoint a person or team to take charge of the transition; (2) consider establishing small task forces of staff at different levels to develop revisions to the firm’s audit methodologies; and (3) provide training for all audit staff.

  Review your client base to determine which clients will be affected first. Although early implementation is not permitted, several changes may require early discussions with client personnel. In addition, some of the changes may affect the auditor’s acceptance of certain engagements. To effect a smooth transition, auditors will need to identify the changes specific to their clients on a case-by-case basis and begin the transition process as early as possible. This may include providing an overview of how the audit engagement may change for key client personnel.

  Update your firm guidance and methodology. In addition to determining changes necessary to audit procedures and training in accordance with your firm’s quality-control procedures, you will need to revise firm guidance and audit methodology to refer to the clarified standards. The effort required for these revisions depends on the level of detail of such references in your firm’s methodology. The brief on mapping of existing AU sections to the Clarified AU-C sections in the AICPA’s Financial Reporting Center is a resource to assist in updating your firm’s guidance and methodology.

(The AICPA has developed several member benefit resources to help CPAs implement the clarified SASs, including white papers, briefs, and presentations. Go to in the AICPA’s Financial Reporting Center to access these materials, which are updated regularly.)

—By Ahava Goldman ( ), AICPA senior technical manager–Audit and Attest Standards, and Amanda Black, CPA, ( ) AICPA senior technical manager–Accounting & Auditing Publications.


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