The Accounting Policy & Practice Report ® provides financial accounting policy makers, advisors, and practitioners with the latest news, expert insights, and guidance on emerging, evolving, and complex accounting issues. Expert News & Commentary.
Aug. 17— Auditors who use auditing standards of the Public Company Accounting Oversight Board—but aren't within that regulator's jurisdiction—also should conduct audits under generally accepted auditing standards (GAAS), the American Institute of CPAs' Auditing Standards Board says.
The AICPA has proposed an amendment to its auditing standards that probably will affect mostly clearing agencies and futures commission merchants registered with the Commodity Futures Trading Commission, according to the proopsal's exposure draft that AICPA issued Aug. 14.
In the proposal, the AICPA's Auditing Standards Board addressed the situation in which an entity, whose audits aren't under authority of the PCAOB, nonetheless seeks an audit conducted in accordance with the regulator's standards. The entity might seek to use the PCAOB standards because it is required to do so by an agency, by a regulator, or by contract, the ASB wrote.
In such situations, the AICPA's Code of Professional Conduct requires members to also carry out the audit in accordance with GAAS, according to the proposal. Using GAAS leads to the audit being conducted under more than one set of auditing standards.
In the described scenario, when the auditor refers to PCAOB standards in addition to GAAS, the auditor should use the report layout and wording prescribed by the auditing standards of the PCAOB. However, the layout and wording would be changed to signal “that the audit was also conducted in accordance with GAAS,” the AICPA auditing rules panel wrote.
The financial statements of the reporting entity and the auditor's report may, under certain circumstances, be filed with or provided to the Securities and Exchange Commission, ASB wrote.
• securities clearing agencies;
• futures commission merchants registered with the CFTC; and
• certain other entities registered with the CFTC that aren't also SEC-registered broker-dealers in securities.
The proposed changes—amendment to Statement of Auditing Standards No. 122 Section 700, Forming an Opinion and Reporting on Financial Statements—also include requirements and guidance for reporting on an audit conducted under both GAAS and PCAOB standards.
The draft auditing standards would be effective for audits of financial statements for periods ending or after Dec. 15 of this year.
The Auditing Standards Board requests that comments be sent by Sept. 30.
To contact the reporter on this story: Steve Burkholder in Norwalk, Conn., at email@example.com
To contact the editor responsible for this story: Laura Tieger Salisbury at firstname.lastname@example.org
The AICPA's proposed amendment to auditing standards is available at http://www.aicpa.org/Research/ExposureDrafts/AccountingandAuditing/DownloadableDocuments/20150814a_ED_AU-C_700_Amendment.pdf.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)