Individual investors’ confidence in U.S. capital markets increased slightly from 2008, with 73% of investors indicating they have at least some confidence compared with 70% last year, according to a telephone survey of 1,000 investors conducted by the Center for Audit Quality and The Glover Park Group released Wednesday. This
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Audit & assurance
PCAOB Publishes Q&A on References to Authoritative Accounting Guidance
The PCAOB on Wednesday published staff questions and answers about references to authoritative accounting guidance in PCAOB standards. The series of Q&As serves as a reminder that auditors should look to the FASB Accounting Standards Codification and SEC rules for authoritative U.S. GAAP guidance for SEC registrants, even though PCAOB
Assessing the Allowance for Doubtful Accounts
Calculating estimates of the collectibility of accounts receivable and auditing those estimates is difficult. This article describes three techniques for assessing allowance for doubtful accounts estimates and complying with Statement on Auditing Standards (SAS) no. 57 and AU section 342, Auditing Accounting Estimates, which suggest auditors compare prior accounting estimates
Auditing
The PCAOB voted to adopt an amendment to a rule on the timing of certain inspections of registered non-U.S. public accounting firms. The amendment to PCAOB Rule 4003(g) gives the board the ability to postpone, for up to three years, the first inspection of any foreign registered public accounting
SEC Approves PCAOB Reporting Rules
The SEC has approved PCAOB rules requiring registered public accounting firms to report certain events. The rules take effect Oct. 12. They implement a provision of the Sarbanes-Oxley Act of 2002 and are the first reporting obligations imposed on registered firms by the board. Under the rules, certain events that
Auditing
The AICPA’s Auditing Standards Board issued Statement of Position (SOP) 09-1, Performing Agreed-Upon Procedures Engagements That Address the Completeness, Accuracy, or Consistency of XBRL-Tagged Data. This interpretative SOP, drafted with the assistance of the XBRL Assurance Task Force of the AICPA Assurance Services Executive Committee, provides guidance regarding the
PCAOB Passes EQR Standard, Solicits Comments on Engagement Partner Signatures on Audit Reports
The PCAOB on Tuesday passed an auditing standard, Engagement Quality Review, requiring an independent reviewer to perform EQRs and superseding the existing concurring partner review requirement. If approved by the SEC, the standard will take effect for the EQR of audits and interim reviews for fiscal years that begin on
PCAOB to Vote on Engagement Quality Review Auditing Standard
The PCAOB on Tuesday will vote on adopting an auditing standard, Engagement Quality Review, which would require EQRs to be performed by an independent reviewer and would supersede the existing concurring partner review requirement. The new standard would require an EQR for audits and reviews of interim financial information (“interim
ASB Seeks Comments on Exposure Drafts
The AICPA Auditing Standards Board issued two exposure drafts resulting from its clarity project: Proposed Statement on Auditing Standards (SAS), Quality Control for an Audit of Financial Statements. The proposed SAS specifies quality control procedures at the engagement level that assist the auditor in achieving the objectives of the quality
ARSC’s Work Plan to Revise SSARSs
Editor’s note: This is a Web-exclusive sidebar to “A Fresh Approach for Compilation and Review.” At the time that the AICPA Reliability Task Force communicated its recommendations to ARSC, ARSC was undergoing a major project to recodify the standards for compilation and review engagements. ARSC had determined that, if
Government
GASB released a statement that incorporates accounting and financial reporting guidance, which was previously only contained in the AICPA’s auditing literature, into GASB’s financial reporting literature for state and local governments. Statement no. 56, Codification of Accounting and Financial Reporting Guidance Contained in the AICPA Statements on Auditing Standards,
A Fresh Approach for Compilation and Review
The AICPA’s Accounting and Review Services Committee (ARSC) has proposed the most significant changes to the professional literature for compilation and review engagements since the December 1978 issuance of SSARS no. 1, Compilation and Review of Financial Statements. The proposed Statements on Standards for Accounting and Review Services (SSARSs), issued
Highlights
The PCAOB issued Staff Audit Practice Alert no. 4 to describe potential implications of three FASB Staff Positions on reviews of interim financial information and annual audits. The FSPs relate to fair value measurement and other-than-temporary impairment. They are: FSP FAS 157-4, Determining Fair Value When the Volume and
Compilation and Review Engagements: Why Tackle This Project Now?
Editor’s note: This article is a sidebar to “A Fresh Approach for Compilation and Review.” Based on concerns expressed by stakeholders in compilation and review engagements, the Accounting and Review Services Committee (ARSC) turned to the AICPA’s Private Companies Practice Section (PCPS) for help in its consideration of how to
Auditing
The AICPA’s Auditing Standards Board issued Proposed Statement on Auditing Standards, Subsequent Events and Subsequently Discovered Facts. The proposal would supersede AU sections 530, Dating of the Independent Auditor’s Report, 560, Subsequent Events, 561, Subsequent Discovery of Facts Existing at the Date of the Auditor’s Report, and paragraphs .71–.73 of
PCAOB Chairman Resigns
Mark Olson on Monday announced his resignation as chairman of the PCAOB, effective July 31. In his letter of resignation, Olson indicated “the decision is entirely personal” and reflects his desire “at this time of life to establish new priorities,” according to a PCAOB press release. He has no immediate
ARSC Issues Proposals in Response to Reliability Task Force Recommendations
The AICPA’s Accounting and Review Services Committee (ARSC) issued an exposure draft that would revise the standards for compilation and review engagements. The changes would affect the interplay between the standards and independence rules, permitting an accountant to issue a review report on financial statements when the accountant’s independence is
Introducing the New Principles-Based Peer Review Standards
Editor’s note: G. William Graham is the AICPA Peer Review Board chair. The effects of the newly revised AICPA Standards on Performing and Reporting on Peer Reviews (Standards) will be far-reaching. They directly impact more than 30,000 firms enrolled in the AICPA’s practice-monitoring program. In addition, the revised standards
Concerns From an Auditor’s Standpoint
Editor’s note: This is a sidebar to “Valuations for Financial Reporting in Today’s Market,” May 09. Having never done a valuation, I have an alternative view from the valuation panel participants since I am from the audit and accounting side. I have been working with Dixon Hughes PLLC’s valuation
Auditing
The AICPA’s Auditing Standards Board released a proposal redrafting Statement on Auditing Standards (SAS) no. 39, Audit Sampling (AICPA, Professional Standards, vol. 1, AU sec. 350), according to the board’s clarity drafting conventions and to converge with International Standard on Auditing (ISA) no. 530 (Redrafted), Audit Sampling. While the proposal
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