PCAOB Chairman James R. Doty sees the audit profession as being at a turning point, not just in the U.S., but globally. “One of the fundamental advantages of our society has always been the audit. We believed we could believe in the numbers and that the numbers would be right.
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TOPICS / AUDIT & ASSURANCE
Audit
Expanding Service Organization Controls Reporting
Several prominent internal control breakdowns and increased focus on internal control by regulators, boards of directors and others charged with governance have led to increased demand for attestation reports on controls over subject matter other than financial reporting provided by an independent CPA. Neither Statement on Auditing Standards (SAS) no.
PCAOB Considers Four Approaches to Changing Auditor’s Report
The PCAOB issued a concept release Tuesday on possible changes to the auditor’s reporting model including the addition of an auditor’s discussion and analysis (AD&A), mandatory emphasis paragraphs, assurance on non-GAAP information and clarification of standard language. A fact sheet issued with the release summarizes each of the possible changes.
Clarified Auditing Standards: The Quiet Revolution
Over the past few years, much attention has been paid to the issue of global harmonization of generally accepted accounting principles while, at the same time, a much quieter revolution has been taking place in generally accepted auditing standards (GAAS). Over the past seven years (see sidebar, “Timeline of Clarification
SEC Report Recommends No New SOX 404(b) Exemptions
An SEC study of Section 404(b) of the Sarbanes-Oxley Act recommends no new exemptions to the requirements. The study by the SEC’s Office of the Chief Accountant was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Its scope was restricted to companies with a market capitalization between
Clarified Auditing Standard Outlines Auditor Requirements Regarding SEC Filings
The AICPA’s Auditing Standards Board has finalized the clarified Statement on Auditing Standards, Filings With the U.S. Securities and Exchange Commission Under the Securities Act of 1933, to supersede AU section 711, Filings Under Federal Securities Statutes, in AICPA Professional Standards. The clarified SAS addresses the auditor’s responsibilities in connection
ASB Issues Exposure Draft to Amend Various Clarified Auditing Standards
The AICPA’s Auditing Standards Board (ASB) issued Proposed Statement on Auditing Standards, Omnibus Statement on Auditing Standards—2011, resulting from its Clarity Project. The comment period ends May 15. The proposed SAS contains amendments to the following: SAS no. 117, Compliance Audits (AICPA, Professional Standards, AU sec. 801). The amendment conforms
Proposed Changes to GAO’s Yellow Book Promote Harmonization of Auditing Standards
In August, the Government Accountability Office (GAO) issued proposed standards revising Generally Accepted Government Auditing Standards (GAGAS), commonly known as the “Yellow Book.” The update revises the July 2007 Yellow Book and is expected to be effective for audits beginning after Dec. 15, 2011, with the exception of the financial
Auditing
The PCAOB released for comment a proposed auditing standard (tinyurl.com/29bayna) that it says would update and expand the requirements related to the auditor’s use of confirmations, requiring a high level of evidence. In a statement issued with the proposed new standard, PCAOB Acting Chairman Daniel Goelzer said the proposal
PCAOB Adopts Suite of Risk Assessment Standards for Audits
The PCAOB on Thursday adopted a suite of eight auditing standards, Auditing Standards (AS) no. 8 through no. 15, that the board said would enhance the effectiveness of the auditor’s assessment of, and response to, the risks of material misstatement in financial statements. The risk assessment standards address audit procedures
AICPA Alert for Auditors of Nonpublic Broker-Dealers
Editor’s note: This alert was compiled by Teighlor S. March, J.D., Senior Manager, Legal, Legislative & Regulatory Affairs for the AICPA. On July 15, 2010, a PCAOB Standing Advisory Group meeting was held in Washington, D.C., to discuss various current topics, including the issue of PCAOB oversight and inspection over
Replacing SAS 70
Guidance for CPAs who audit the financial statements of entities that outsource work to service organizations and those who report on controls at service organizations is being revamped and relocated. Since 1992, Statement on Auditing Standards (SAS) no. 70, Service Organizations, has been the source of the requirements and guidance
PCAOB Proposes Higher Evidence Standards in Audit Confirmations
The PCAOB released for comment a proposed auditing standard that it says would update and expand the requirements related to the auditor’s use of confirmations, requiring a high level of evidence. In a statement issued with the proposed new standard on Tuesday, PCAOB Acting Chairman Daniel L. Goelzer said the
Auditing
The AICPA prepared a set of questions and answers to help explain the changes resulting from the issuance of Statement on Standards for Attestation Engagements no. 16, Reporting on Controls at a Service Organization, by the Auditing Standards Board. SSAE no. 16 applies when data resulting from an outsourcing
FAQ Outlines New Service Organization Standards
The AICPA has developed a set of questions and answers to help explain the changes resulting from the recent issuance of Statement on Standards for Attestation Engagements No. 16, Reporting on Controls at a Service Organization, by the AICPA’s Auditing Standards Board. SSAE No. 16 is applicable when an entity
News Highlights for June 2010
The PCAOB proposed for comment an auditing standard, Communications with Audit Committees, and a series of related amendments to its interim standards. The proposal includes a requirement for the auditor to establish a mutual understanding of the terms of the audit engagement with the audit committee and to document that
Risk Assessment Standards Clarified
The Auditing Standards Board recently issued six clarified Statements on Auditing Standards related to risk assessment resulting from its clarity project, through which all of its auditing standards will be redrafted over the next one to two years. The board also issued additional proposed SASs. The goal of the clarity project
News Highlights for May 2010
The Auditing Standards Board recently issued six clarified Statements on Auditing Standards related to risk assessment resulting from its clarity project, through which all of its auditing standards will be redrafted over the next one to two years. The board also issued additional proposed SASs. The goal of the clarity
Auditing
The AICPA’s Audit and Attest Standards staff has issued Technical Practice Aid (TPA) 9110.16, Example Reports on Federal Deposit Insurance Corporation Loss Sharing Purchase and Assumption Transactions, to provide guidance to independent auditors on the type of report they might have to give to the FDIC regarding a loss-sharing
PCAOB Reminds Auditors of Requirements Related to Unusual Transactions
The PCAOB on Wednesday issued an alert reminding public company auditors of their responsibilities related to the risk of material misstatements stemming from error or fraud associated with significant unusual transactions. “The PCAOB’s message to auditors, in this challenging economic environment, has consistently emphasized attention to audit risk and adherence
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