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,
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Audit & assurance
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
Technical practice aids address questions on audits of group financial statements
Nonauthoritative guidance arising from implementation issues is provided in 16 additional Technical Questions and Answers (TPAs) included as paragraphs .24 to .39 of TIS Section 8800, “Audits of Group Financial Statements and Work of Others.” Implementation issues, particularly regarding equity investments, are addressed in the guidance for AU-C Section 600,
Auditors required to modify New York City form
Auditors providing an opinion on operating income and expenses for New York City Tax Commission certiorari filings are required to modify a certification form to comply with new standards, according to the AICPA. Under those conditions, auditors are required to modify Form TC309, Accountant’s Certification, to comply with new generally
CAQ educational guide describes internal control process
A new guide released Thursday by the Center for Audit Quality (CAQ) is designed to educate investors and the general public on a process that reinforces reliable financial reporting at U.S. public companies. The CAQ’s Guide to Internal Control Over Financial Reporting describes how companies enhance the reliability of their
PCAOB may propose reorganization of auditing standards
The PCAOB is considering proposing a reorganization of its auditing standards that would be designed to present them in a logical order that generally follows the flow of how an audit is conducted. An open meeting of the board has been scheduled for 9:30 a.m. Tuesday to consider issuing for
ASB corrects clarified auditing standard AU-C 920
The AICPA Auditing Standards Board (ASB) has 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
New AICPA not-for-profit guide available
A new, greatly enhanced AICPA audit and accounting guide, Not-for-Profit Entities, is available in ebook form. The AICPA Auditing Standards Board (ASB), Financial Reporting Executive Committee (FinREC) and Not-For-Profit Guide Task Force have revised the guide, making significant enhancements to improve user understanding and minimize diversity in practice. Enhancements include:
Avoid audit deficiencies
Fair value measurements (FVMs) and asset impairment testing were among the most prevalent deficiencies found in audits in the wake of the economic crisis of 2008. Consulting firm Acuitas Inc. gives tips on how to mitigate some of the more common trouble spots: Examine projected financial information (PFI) assumptions. Assess
Auditing
The SEC 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
Clarifying the standard for group audits
As a result of the AICPA Auditing Standards Board’s (ASB) Clarity Project, a new standard has been developed that provides clearer requirements and guidance for audits of group financial statements, in particular those in which part of the work is performed by auditors other than the auditor who expresses the
Report shows decrease in audit deficiencies among certain U.S. firms
A new PCAOB report appears to signal improvement in audit quality among U.S. firms that audited 100 or fewer public companies. The rate of significant audit performance deficiencies identified in audits conducted by such firms declined from 2007 to 2010 compared with the 2004–2006 period tracked in a previous PCAOB
U.K. regulator considering mandatory audit firm rotation
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
Proposed federal grant reforms would raise single-audit threshold
Proposed reforms designed to streamline and improve the way the federal government administers more than $600 billion in grants annually were published Friday 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 Governments,
PCAOB reaches agreement with French, Finnish audit regulators
The PCAOB has reached agreements with audit regulators in France and Finland that provide a framework for joint inspections of audit firms subject to the regulatory jurisdictions of the PCAOB and regulators in those countries. The agreements with the French High Council for Statutory Auditors (H3C) and the Auditing Board
Internal audit reporting line to CEO gains steam as Fed weighs in
The idea of having the internal audit function report administratively to the CEO may be gaining steam. The Federal Reserve has issued guidance to encourage U.S. banks with more than $10 billion in total assets to have their internal audit functions report to the chief executive—a move that could influence
From CGMA Magazine: Softer skills for a broader role
Internal auditors were once thought of solely as the go-to people for all issues relating to financial controls and governance. But in the wake of the global financial crisis, internal auditors have become increasingly relied upon to identify operational risks and provide strategic insight on everything from mergers and acquisitions
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