Auditors looking for guidance on the new clarified auditing standard about audits of group financial statements can turn to a new resource. The new standard, AU-C Section 600, Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors) (AICPA, Professional Standards), took effect for audits of group financial
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Audit & assurance
PCAOB finds common threads in ICFR audit deficiencies
Insufficient testing of controls and failure to properly evaluate control deficiencies were among the common findings that led the PCAOB to issue a summary of observations from 2010 inspections of audits of internal control over financial reporting. The PCAOB on Monday released a 31-page report on deficiencies in firms’ audits
PCAOB will issue report on problems with audits of ICFR
Persistent problems related to audits of internal control over financial reporting (ICFR) have led the PCAOB to issue a report describing the four problems. The PCAOB will issue a Rule 4010 report to describe the results of recent inspections with regard to audits of ICFR, PCAOB Director of Registration and
Obstacles make PCAOB’s Hanson skeptical about mandatory audit firm rotation
PCAOB member Jay Hanson said Tuesday that he struggles to see how the board would ever be able to create a mandatory audit firm rotation requirement for the U.S. public company auditors it regulates. During a question and answer session at the AICPA Conference on SEC and PCAOB Developments in
PCAOB alert says audits must be conducted with skeptical eye
The PCAOB is reminding auditors to maintain their professional skepticism when they conduct audits. A staff audit practice alert issued Tuesday by the PCAOB said the board has observed continued instances in which auditors did not appropriately apply professional skepticism. Staff Audit Practice Alert No. 10: Maintaining and Applying Professional
Auditing
Change apparently is coming to the auditor’s report, but views vary over the appropriate content and structure for reports, and particularly over the issue of “auditor commentary.” The question of appropriate content and structure for the auditor’s report was the subject of an International Auditing and Assurance Standards Board
IAASB proposes that auditors expand review of “other information”
A new International Auditing and Assurance Standards Board (IAASB) proposal would require auditors to read and consider information in certain documents that accompany audited financial statements. If this additional information leads the auditor to identify a material inconsistency, or a misstatement in the audited financial statements, the auditor would be
ARSC seeks comment on SSARS proposals
The AICPA Accounting and Review Services Committee (ARSC) has exposed for public comment proposed Statements on Standards for Accounting and Review Services (SSARS) as part of its clarity project. ARSC has separated the proposals in an attempt to make the clarified standards easier to use, understand, and implement. The proposed
PCAOB inspection process explained in CAQ guide
PCAOB inspections are inevitable for firms that audit public companies. Firms that audit more than 100 public companies are inspected yearly. Firms that audit fewer than 100 public companies are inspected at least once every three years. A high-level overview of that process is provided by the Center for Audit
Ethics / Compilation & review
Two AICPA committees extended comment deadlines to Nov. 30 on recently proposed revisions to professional standards. The proposed change to the ethics rules would require CPAs who prepare financial statements for attest clients to apply the general requirements of Interpretation No. 101-3, Nonattest Services, to maintain their independence. Proposed changes
Auditing
The AICPA’s Auditing Standards Board (ASB) issued Statement on Auditing Standards (SAS) No. 126, The Auditor’s Consideration of an Entity’s Ability to Continue as a Going Concern (Redrafted), as a result of its Clarity Project to supersede SAS No. 59, The Auditor’s Consideration of an Entity’s Ability to Continue
Embracing change
Richard J. Caturano, CPA, CGMA Title: Executive managing partner, Boston office, McGladrey LLP City: Boston Education: B.S. in accounting, M.S. in taxation, Bentley College Date of birth: Nov. 18, 1952 Family: Wife, Barbara; son, Anthony; daughter, Christina Ryan; son-in-law, Shane Ryan; grandson, Rhys Richard Ryan Device he can’t live without:
Guidance issued on reporting pursuant to the Global Investment Performance Standards
Issued under the authority of the AICPA Auditing Standards Board, Statement of Position 12-1, Reporting Pursuant to the Global Investment Performance Standards, supersedes SOP 06-1 of the same title and paragraphs 11.37–.42 of chapter 11, “Independent Auditor’s Reports and Client Representations,” of the AICPA Audit and Accounting Guide Investment Companies
New tool aids in evaluation of external auditors
With interactions between audit committees and external auditors a focus of a steady stream of news recently, a new tool has been developed to assist audit committees in annual evaluations of external auditors. The Center for Audit Quality (CAQ), which is affiliated with the AICPA, is one of seven organizations
CAQ releases practice aid on audit communication
How should audit firms and audit committees be talking to each other? The Center for Audit Quality (CAQ) examines the question in a brief guide released Wednesday on ways to enhance the flow of information on audit inspections and quality-control matters. The CAQ practice aid says that “transparent, candid communication
ASB recommends scoping nonissuers out of “auditor commentary” requirements
An AICPA committee is weighing in on a recent International Auditing and Assurance Standards Board (IAASB) proposal that would require expanded commentary in auditors’ reports. Nonissuers, such as private companies and nonprofits, should be scoped out of requirements for “auditor commentary” when the IAASB’s proposed standard is developed, according to a
Survey takes pulse of board members, shows opposition to audit firm rotation
Corporate board members charged with oversight of U.S. public companies are opposed to mandatory rotation of external auditors by more than 2 to 1, a new survey shows. Mandatory audit firm rotation is a continuing subject of debate in Europe and the United States, where regulators are exploring such a
Scope of appropriate content, structure in auditor’s report under debate
Change apparently is coming to the auditor’s report, but views vary over the appropriate content and structure for reports, and particularly over the issue of “auditor commentary.” The question of appropriate content and structure for the auditor’s report was the subject of an International Auditing and Assurance Standards Board (IAASB)
Proposed amendments clear way for audits of SME Framework financial statements
Proposed amendments to auditing standards issued today by the AICPA Auditing Standards Board (ASB) include changes that would clear the way for audits of financial statements prepared in accordance with the special-purpose financial reporting framework for small and medium-size entities (FRF-SME) the AICPA is developing. The proposal, Omnibus Statement on
Comment deadlines extended on proposed professional standard revisions
Two AICPA committees are extending comment deadlines to Nov. 30 on recently proposed revisions to professional standards. The proposed change to the ethics rules would require CPAs who prepare financial statements for attest clients to apply the general requirements of Interpretation No. 101-3, Nonattest Services, to maintain their independence. The
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