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
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Audit & assurance
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
PCAOB reproposes related-parties auditing standard
The PCAOB on Tuesday reproposed an auditing standard and amendments designed to improve the quality of auditing of related-party transactions and significant unusual transactions. The reproposed standard is designed to increase the auditor’s focus on the evaluation of how a company identifies, accounts for, and discloses its relationships and transactions
Goal for PCAOB’s Hanson: Best practices list for auditors
PCAOB member Jay Hanson wants to talk to auditors who produce audits with no deficiencies. He’s pushing to develop a “best practices” list that will help and inform the entire profession. “I know that this view isn’t shared universally among the board members of the PCAOB as to whether we
PCAOB to consider related-parties re-proposal
The PCAOB will meet Tuesday to consider re-proposing an auditing standard on related parties. PCAOB member Jay Hanson said Thursday that the board is making the second proposal in response to comments it received on the first proposal, which was made Feb. 28, 2012. More comments will be sought on
Assurance opportunities broaden
Editor’s note: Beth Schneider is the chair of the AICPA Sustainability Task Force under the Auditing Standards Board. Corporate and public interest in sustainability and climate change issues, and voluntary reporting of greenhouse gas (GHG) emissions information, has grown significantly in the United States during the last decade. Companies have
Defending third-party audit claims
Early in the 20th century, audits of company financial statements served merely as verification for management that a company was productive and efficient. After the 1929 stock market crash, the role of the auditor evolved. The Securities Act of 1933 and the Securities Exchange Act of 1934 established requirements for
Auditing
The AICPA Auditing Standards Board (ASB) made a correction to an auditing section in the AICPA Professional Standards to reinforce the board’s intentions not to change practice and to avoid unintended consequences. The auditing (AU) sections were redrafted as part of the clarity project to reflect the ASB’s established
The assurance market for sustainability reporting
Editor’s note: Also read “Assurance opportunities broaden,” May 2013. Research published in The Journal of Business Ethics in 2012 titled “Multinationals’ Accountability on Sustainability: The Evolution of Third-Party Assurance of Sustainability Reports,” explores the third-party assurance market for external corporate social responsibility (CSR) reporting. The authors, Paolo Perego and Ans
Analyzing liquidity using the cash conversion cycle
A good assessment of a company’s liquidity is important because a decline in liquidity leads to a greater risk of bankruptcy. FASB describes liquidity as reflecting “an asset’s or liability’s nearness to cash” (Statement of Financial Accounting Concepts No. 5, Recognition and Measurement in Financial Statements of Business Enterprises). Creditors
New TPAs provide guidance for auditors
The AICPA has issued nonauthoritative guidance in five Technical Question and Answer (TPA) releases, which are available on the AICPA website. TPA 9110.22 provides guidance for auditors when an entity’s financial statements are audited in accordance with generally accepted auditing standards and Government Auditing Standards. When both standards are used,
Europe takes step toward mandatory audit firm rotation
The European Union took a step toward requiring mandatory audit firm rotation Thursday when the European Parliament’s Legal Affairs Committee voted 15–10 in favor of a draft law that would require public-interest entities such as banks, insurance firms, and listed companies to rotate audit firms every 14 years. That period
New PCAOB policy describes rewards for extraordinary cooperation
Registered public accounting firms and auditors whose cooperation with PCAOB investigations is deemed “extraordinary” may be rewarded with reduced penalties in disciplinary proceedings. The PCAOB issued a formal policy statement Wednesday that defines extraordinary cooperation and describes incentives for firms and individuals that make voluntary, extra efforts to aid the
Auditing
Proposed reforms designed to streamline and improve the way the federal government administers more than $600 billion in grants annually have been published by the Office of Management and Budget (OMB). The OMB is proposing broad reforms to compliance audits performed under OMB Circular A-133, Audits of States, Local
PCAOB attempting to make auditing standards easier to navigate
The PCAOB on Tuesday 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. The board
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