A much awaited summary of provisional findings of the U.K. Competition Commission (CC) stated that companies are reluctant to change auditors because they have difficulty comparing alternatives with their existing auditor, prefer continuity, and face significant costs in switching auditors. In addition, the provisional findings, released Friday, stated that instead
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TOPICS / AUDIT & ASSURANCE
Audit
SEC approves PCAOB standard on communication with audit committees
The SEC has approved PCAOB Auditing Standard No. 16, Communications with Audit Committees, and related amendments to PCAOB standards that were designed to help external auditors communicate effectively with audit committees during public company audits. All U.S. public companies, including emerging growth companies as defined in the Jumpstart Our Business
Twenty-three tips provide implementation guidance about audits of group financial statements
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
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
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
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
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
ASB seeking feedback specific to U.S. auditor’s reports
The AICPA’s Auditing Standards Board (ASB) is asking members to complete a survey to help inform the board’s response to the International Auditing and Assurance Standards Board (IAASB) Invitation to Comment: Improving the Auditor’s Report (ITC). On June 22, the IAASB released its ITC, seeking input on potential changes to
The week ahead: PCAOB considers audit committee communications standard
An auditing standard on communications between auditors and audit committees that has been under development for more than two years will be among the most-watched items in the accounting profession this week. The PCAOB will consider the reproposed standard for adoption during an open meeting of the PCAOB at 9:30
ASB to vote on whether to propose amendments to two clarified auditing standards
The AICPA Auditing Standards Board (ASB) will vote Aug. 16 on whether to issue an exposure draft to propose amending two clarified standards that take effect Dec. 15. In response to member requests for further clarity, the ASB plans to propose Omnibus Statement on Auditing Standards—2012. This proposed statement on
Auditing Standards Board issues Statement on Auditing Standards No. 126
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 as
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
Audit rotation debated in House subcommittee hearing
Members of Congress asked pointed questions of PCAOB Chairman James Doty on Wednesday as the hot topic of mandatory audit firm rotation was debated during a wide-ranging discussion of accounting and auditing issues in front of a House subcommittee. Rep. Scott Garrett, R-N.J., the chairman of the House Subcommittee on
Auditor’s reporting model proposal scheduled for third quarter
The PCAOB’s proposed changes to the auditor’s reporting model are on track to be issued for public comment in the third quarter of 2012, according to a standard-setting agenda the board released Monday. PCAOB Chairman James Doty said in December that he thought the proposal would be out by the
PCAOB reopens comment period on audit firm rotation concept release
The PCAOB has reopened its comment period regarding a debated concept release on auditor independence and audit firm rotation. The original comment period closed Dec. 14. The new deadline is April 22, the PCAOB said Wednesday. The board extended the deadline to incorporate comments following a March 21–22 public meeting
PCAOB outlines related parties proposal, other amendments
The PCAOB on Tuesday issued for public comment a proposed auditing standard on related parties and proposed amendments on significant unusual transactions. The board said the proposals are designed to improve auditors’ focus on certain areas of risk. In addition, the PCAOB proposed amendments to its rules and forms to
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