Six possible elements of audit quality are highlighted in a report released Tuesday by the Center for Audit Quality (CAQ). The report describes elements of audit quality that audit firms could consider in refining or developing their own reporting regarding their public company audit practices. The elements are: Firm leadership
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Audit & assurance
PCAOB to consider proposing new auditor’s reporting model
The PCAOB will meet Tuesday to consider proposing a new auditor’s reporting model as well as new auditor’s responsibilities for other information in an annual report that contains audited financial statements and the auditor’s report. The contents of the auditor’s report have been the subject of significant activity by standard
SEC strengthens broker-dealer audit requirements
The SEC on Wednesday approved rule amendments that strengthen audit requirements for broker-dealers. The amendments are intended to increase protections for investors whose money and securities are turned over to SEC-registered broker-dealers. The final rules are available on the SEC’s website. Under previous rules, broker-dealers are required to file annual
What’s your fraud IQ?
The word skepticism is derived from the Greek word skeptesthai, meaning “to reflect, look, or view.” It has evolved over the past 2,300 years to represent, among other definitions, the application of reason and critical analysis in the search for a factually supported conclusion. In this context, the concept of
Public, private companies report rise in audit fees in FY 2012
Fees for external audits of financial statements paid by U.S. public and private companies rose in fiscal year 2012 over the previous year, according to a new survey report. Audit fees paid by 87 public companies averaged $4.5 million in FY 2012, according to a Financial Executives International (FEI) report.
Proposed international standard would change auditor reports
International auditor reporting guidelines would change significantly and require more communication from auditors under standards proposed Thursday by the International Auditing and Assurance Standards Board (IAASB). The IAASB’s exposure draft includes a new proposed international auditing standard, Communicating Key Audit Matters in the Independent Auditor’s Report, which directs auditors to
ASB proposes clarifying attestation standards
The AICPA Auditing Standards Board (ASB) is proposing changes to its attestation standards as a part of its clarity project. An exposure draft issued Wednesday would clarify and recodify certain Statements on Standards for Attestation Engagements (SSAEs) in the AICPA’s Professional Standards. The ASB has undertaken the clarity project to
U.K. proposal a second blow to mandatory audit firm rotation
Mandatory audit firm rotation was not among the measures the U.K. Competition Commission (CC) proposed Monday to promote competition in the statutory audit services market. But the CC did include mandatory tendering every five years for the United Kingdom’s largest companies in its proposal, a significant shift from the 10-year
New duties on horizon for internal auditors
Even as assurance and compliance responsibilities are expanding for internal auditors, a significant shift in their strategic duties is on the horizon, according to a new survey. More than half (54%) of respondents expect that in the next two years, internal audit’s primary mandate will be providing stakeholders with business
Bill prohibiting mandatory audit firm rotation passes U.S. House
The U.S. House of Representatives on Monday approved a bipartisan bill that would prohibit the PCAOB from requiring mandatory audit firm rotation for public companies. The bill, sponsored by Reps. Robert Hurt, R-Va., and Gregory Meeks, D-N.Y., was introduced on April 15. It would amend the Sarbanes-Oxley Act of 2002
GAO advises SEC to require disclosure of auditor attestation of ICFR
The U.S. Government Accountability Office (GAO) is recommending that the SEC consider requiring public companies to disclose whether they obtained an auditor attestation of their internal controls over financial reporting (ICFR). In a report to congressional committees, the GAO said attestation reports increase investor confidence. Requiring disclosure of whether a
How to maintain independence when auditing a conflict minerals report
An auditor of an SEC issuer’s financial statements is not precluded from performing an independent private-sector audit of that client’s conflict minerals report, according to nonauthoritative guidance prepared by an AICPA task force. Seven new questions and answers the AICPA has issued on its Conflict Minerals Resources webpage provide nonauthoritative
Auditing
The PCAOB took the first step toward what’s intended to be a comprehensive reorganization of its auditing standards. Board members unanimously voted to publish a proposal for a framework that would place the PCAOB’s auditing standards into a topical structure with a single, integrated numbering system. May 28 was
Pact enables PCAOB, Chinese regulators to cooperate on enforcement
The PCAOB has entered into a much-sought enforcement cooperation agreement with Chinese regulators. A memorandum of understanding announced Friday creates a cooperative framework between the PCAOB and the China Securities Regulatory Commission (CSRC) and the Ministry of Finance (MOF). The agreement does not allow for cross-border inspections, but it establishes
PCAOB systems unavailable Memorial Day weekend
Many of the PCAOB’s systems will be unavailable over the Memorial Day weekend while the board’s data center undergoes extensive maintenance. Systems that will be unavailable beginning at 8 p.m. Friday include: The public website. The registration, annual, and special reporting system. The payments system. The system will come back
Change in definition of attest clears hurdle
The AICPA governing Council on Sunday approved a resolution to change the definition of attest—a key step in an effort to promote the quality of services for both clients and the greater public. Although the exact legislative language has yet to be determined, the AICPA in partnership with the National
Key factors cited as discussion of audit quality indicators nears
An effective definition of audit quality should encompass two key factors, the Center for Audit Quality (CAQ) told the PCAOB in a comment letter dated May 13. The CAQ, which is affiliated with the AICPA, has been working over the past several months to develop perspectives that could help define
ASB exposes clarified auditing standard on internal audit
The Auditing Standards Board (ASB) has exposed a new, clarified standard that applies to use of the work of internal auditors. With the issuance of the Proposed Statement on Auditing Standards (SAS), Using the Work of Internal Auditors, the ASB has completed the clarity project redrafting of its last unclarified
Resources help auditors resolve issues with regulator-prescribed forms
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
AICPA provides guidance on auditing conflict minerals reports
Recently implemented federal rules on disclosure of conflict minerals have mandated new audit requirements for some U.S. issuers. The AICPA Conflict Minerals Resources webpage provides background and other useful information about the use of conflict minerals, which are gold, tantalum, tin, and tungsten. In addition, new Questions and Answers have
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