Without concrete, objective ways to measure audit quality, it is difficult to assess whether efforts to improve audits have been successful. The International Auditing and Assurance Standards Board (IAASB), one of many organizations attempting to tackle this challenge, has issued a consultation paper, A Framework for Audit Quality, that it
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Audit & assurance
AICPA committee withdraws compilation, association ED
The AICPA Accounting and Review Services Committee (ARSC) has voted to withdraw its compilation and association exposure draft in response to comment letters from stakeholders. The compilation proposal would have revised the applicability of the compilation standard but would have retained the compilation service as an attest service. The association
CAQ, AAA team to give researchers access to audit firm personnel
A new program announced Thursday by the Center for Audit Quality (CAQ) and the Auditing Section of the American Accounting Association (AAA) will help accounting and auditing academics gain access to audit firm personnel to participate in academic research projects. The joint venture between the CAQ and AAA Auditing Section
Amendment enables audits of statements prepared under new framework
A new statement issued by the Auditing Standards Board (ASB) clears the way for audits of financial statements prepared in accordance with the Financial Reporting Framework for Small- and Medium-Sized Entities (SMEs) that the AICPA is developing. Statement on Auditing Standards (SAS) No. 127, Omnibus Statement on Auditing Standards—2013, defines
Effective date of AU-C Section 905 in compliance audit a matter of judgment
Auditors should use professional judgment of the circumstances to determine which effective date of AU-C Section 905 applies in a compliance audit performed pursuant to AU-C Section 935, Compliance Audits, and Office of Management and Budget Circular A-133, Audits of States, Local Governments and Non-Profit Organizations, according to a new
“Exciting and challenging times” coming for auditors
International auditing standards appear set for a period of substantial change as investors seek more information, new forms of reporting emerge, and companies look to provide assurance on additional items. The International Auditing and Assurance Standards Board (IAASB) plans to release an exposure draft in June in its ongoing project
More North American companies rewarding internal auditors with pay raises, perks
Internal auditors—whose roles have increased in importance in recent years due to increased regulatory demands—were more likely to receive pay raises in 2012, and those with specialized skills and certifications received larger pay increases, according to new research. The analysis, conducted by the Institute of Internal Auditors (IIA), also revealed
Budget, staff projected to rise for internal audit departments
Companies are devoting more money and staff to internal audit. Half of companies are maintaining their internal audit budget, and 41% plan to increase their spending, according to The Pulse of the Profession, a twice-annual survey of North American audit executives by The Institute of Internal Auditors (IIA). That’s the
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 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
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