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Auditing Standards Board Issues Standards for Public Comment

During its three-day meeting in Montreal, Quebec, Canada, last month, the American Institute of Certified Public Accountants’ (“AICPA”) Auditing Standards Board (“ASB”) moved forward on issuing proposed clarified attestation standards Chapter 8, “Reporting on Controls at a Service Organization,” and Statement on Auditing Standards (SAS), An Audit of Internal Control Over Financial Reporting That is Integrated With an Audit of Financial Statements, for public comment. If both become final, then Chapter 8 would replace the current AT Section 801, “Reporting on Controls at a Service Organization”, and the proposed SAS would supersede AT Section 501, “An Examination of an Entity’s Internal Control Over Financial Reporting That Is Integrated With an Audit of Its Financial Statements,” and Interpretation No. 1 of AT Section 501, “Reporting Under Section 112 of the Federal Deposit Insurance Corporation Improvement Act” (AT section 9501).

Also at the meeting, the ASB reviewed other standard-setters’ projects regarding going concern assessments and the auditor’s report. For instance, the International Auditing and Assurance Standards Board hopes to present a new section in the auditor’s report to discuss which matters the auditor listed as most significant. In addition, the Financial Accounting Standards Board’s going concern plan would require a company to reveal new information in its financial statement footnotes if there is “substantial doubt” about its survival, and the Public Company Accounting Oversight Board is revising a proposal based on Release No. 2013-005, Proposed Auditing Standards on the Auditor’s Report and The Auditor’s Responsibilities Regarding Other Information and Related Amendments. The ASB plans to monitor any future updates on these projects.

Other notables from the meeting included the latest on the Quality Control Standards Task Force’s recommendations to the ASB’s quality control standards. The task force will continue collecting information and report its findings to the ASB in October. The ASB also examined creating standards for performance audits to be part of the AICPA Professional Standards, and problems associated with Chapter 4, “Agreed Upon Procedures,” of the Attestation Standards.

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