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AICPA issues proposed SAS on audit evidence

Jun 21, 2019

On June 21, 2019, the American Institute of CPA’s (AICPA) issued a proposed Statement on Auditing Standards (SAS), “Audit Evidence.”

The proposed SAS is intended to address “the evolving nature of business and audit services and issues that have arisen during the standard-setting activities of the [Auditing Standards Board, including] use of emerging technologies by both preparers and auditors, audit data analytics (ADA), the application of professional skepticism, the expanding use of external information sources as audit evidence, and more broadly, the accuracy, completeness, and reliability of audit evidence.”

If finalized, the proposed SAS would supersede Section 500, Audit Evidence, of SAS 122, Statements on Auditing Standards: Clarification and Recodification, as amended.

Comments on the proposed SAS are due by September 18, 2019. For more information, see the proposed SAS on the AICPA’s Web site.

AICPA proposes amendments to converge concepts in SSARS with global assurance standards

Jun 20, 2019

On June 20, 2019, the Accounting and Review Services Committee of the American Institute of CPA’s (AICPA) issued a proposed Statement on Standards for Accounting and Review Services (SSARS), “Materiality in a Review of Financial Statements, Adverse Conclusions, and Special Purpose Frameworks.”

The proposed amendments are intended to more closely align SSARS with International Standard on Review Engagements 2400 (Revised), Engagements to Review Historical Financial Statements, and thereby “facilitate the accountant’s ability to perform and report on engagements in accordance with both sets of standards.”

Comments on the proposed SSARS are due by September 20, 2019.

For more information, see the proposed SSARS on the AICPA’s Web site.

IAASB and IESBA increase collaboration with National Standards Setters

Jun 20, 2019

On June 20, 2019, the In­ter­na­tional Au­dit­ing and As­sur­ance Stan­dards Board (IAASB) and the In­ter­na­tional Ethics Stan­dards Board for Ac­coun­tants (IESBA) shared a brief update on their latest initiative to support global standard setting and to better leverage the coordination opportunities between their two boards.

With global regulatory fragmentation risk on the rise, and greater international collaboration on the forthcoming G20 agenda, they announced that, in May 2019, they convened a meeting in Paris with national audit and ethics standard-setting organizations representing 17 jurisdictions.

The IAASB and IESBA dubbed this four-way dialogue (IAASB + IESBA + national audit & assurance + ethics standards setters) a “quadrilogue”.

The discussions marked the beginning of an exploratory and evolutionary process for the IAASB and IESBA to work with national standard setters, and for national standard setters to work with each other, to consider new ideas in pursuit of mutually shared objectives.

The meeting advanced already-significant IAASB and IESBA coordination efforts, which acknowledge the importance of audit and ethics standards to audit quality. The meeting facilitated further collaboration between a number of national audit & assurance standard setters and the IAASB, as well as identifying ways national standard setters can work more effectively together in the interests of international standard setting.

Some important themes emerged from the “quadrilogue”:

  • the value of continued IAASB and IESBA coordination, the significant advances made to-date, and how it serves as a catalyst for national coordination;
  • the importance of early coordination between our two boards, and increased stakeholder communications about it;
  • recognition that it is important to identify the areas where four-way engagement makes most sense; and
  • quality management within accountancy firms, implications of technology developments, stakeholder engagement, and enhanced implementations activities are possible topics for further exploration.

Re­view the announcement on the IAASB’s web­site.

CPA Canada Article – Auditing crypto-assets: be bold but recognize the risks, say experts

Jun 10, 2019

On June 10, 2019, CPA Canada is­sued an ar­ti­cle writ­ten by Taryn Abate, director of audit and assurance with the research, guidance and support department at CPA Canada which informs read­ers about auditing crypto-assets, including that CPA Canada has set up a new working group that is looking at how best to approach this new service area.

Read the ar­ti­cle on the CPA Canada web­site.

Joint IAASB IESBA Comment Letter in Response to the UK’s Brydon Review

Jun 03, 2019

On June 3, 2019, the International Auditing and Assurance Standards Board (IAASB) and the In­ter­na­tional Ethics Stan­dards Board for Ac­coun­tants (IESBA) issued a joint response to the UK's Brydon review. In addition to responding to the Brydon review's proposals, the letter highlights how both Boards act in the public interest to support public confidence in audits of financial statements and other assurance engagements, and also serve to reinforce the important ethical responsibilities of professional accountants in business in the external reporting ecosystem.

The Brydon review is an independent review, established by the UK government in late 2018 and led by Sir Donald Brydon; it is looking at audits as a product and what audits should be in the future. It will address the audit expectation gap: the difference between what people think an audit does and what it actually does. It will also look at the scope of an audit, any changes that may need to be made to it and how it can better serve the public interest. The independent review will be supported by advisory groups that will provide advice and challenge emerging findings and recommendations.

Re­view the joint response on the IAASB’s website.

Tom Seidenstein to Lead the International Auditing and Assurance Standards Board

Jun 03, 2019

On June 3, 2019, the In­ter­na­tional Au­dit­ing and As­sur­ance Stan­dards Board (IAASB) announced that Mr. Thomas R. Seidenstein will become the new chair of the IAASB for a three-year term commencing July 1, 2019. He succeeds Prof. Arnold Schilder, who has led the IAASB since 2009.

Mr. Seidenstein’s career spans both international standard setting and the private sector. He is currently senior vice president for Strategy, Innovation and Capital Management at Fannie Mae, a leading source of US housing market liquidity. He previously served as the chief operating officer at the International Financial Reporting Standards Foundation, where he led the organization’s governance review and reform process and worked closely with regulators to support global adoption of International Financial Reporting Standards. He holds a Master in Public Policy from the Harvard Kennedy School and is an undergraduate of the Woodrow Wilson School of Public and International Affairs, Princeton University.

Mr. Seidenstein’s appointment was recommended by the Interim Nominating Committee after an extensive international search. His appointment was endorsed by the IFAC Board and approved by the Public Interest Oversight Board, which oversees the IAASB.

For fur­ther de­tails, please re­fer to the press re­lease on the IAASB”s web­site.

AASB Exposure Draft – Conducting a performance audit in the Public Sector in accordance with CSAE 3001

May 31, 2019

On May 31, 2019, the Au­dit­ing and As­sur­ance Stan­dards Board (AASB) is­sued an Exposure Draft of a proposed new Guideline dealing with conducting a performance audit in the Public Sector in accordance with CSAE 3001. Stakeholders are encouraged to submit their comments by August 30, 2019.

The AASB proposes, subject to comments received following exposure, to issue Assurance and Related Services Guideline (AuG) 50, Conducting a Performance Audit in the Public Sector in Accordance with CSAE 3001.

AuG-50 would replace:

  1. Section PS 5000, Introduction to Assurance Recommendations that Apply only to the Public Sector;
  2. Section PS 5400, Value-for-money Auditing in the Public Sector
  3. Section PS 6410, Planning Value-for-money Audits in the Public Sector; and
  4. Section PS 6420, Knowledge of the Audit Entity in Planning Value-for-money Audits in the Public Sector.

 Re­view the press re­lease and the Exposure Draft on the AASB's web­site.

PCAOB Posts Staff Guidance on Communications with Audit Committees Concerning Independence

May 31, 2019

On May 31, 2019, the Pub­lic Com­pany Ac­count­ing Over­sight Board (PCAOB) posted to its website staff guidance on PCAOB Rule 3526(b), Communication with Audit Committees Concerning Independence. The guidance provides background on Rule 3526 and technical guidance for auditors on the independence-related communications required by the rule.

Re­view the overview of staff guidance  and the staff guidance specific to Rule 3526(b) on the PCAOB's web­site.

AASB Discussion Paper – Audits of Less Complex Entities

May 30, 2019

On May 30, 2019, the Auditing and Assurance Standards Board (AASB) issued its Discussion Paper that corresponds to the IAASB’s discussion paper on this topic. Stakeholders are encouraged to submit their comments by August 14, 2019.

Review the press release and Discussion Paper on the AASB's website.

PCAOB posts staff guidance: A deeper dive on the communication of CAMs

May 22, 2019

On May 22, 2019, the Public Company Accounting Oversight Board (PCAOB) released a staff guidance document, "A Deeper Dive on the Communication of CAMs", developed to support implementation of the new critical audit matter requirements.

This document was informed by discussions with auditors regarding their experiences conducting dry runs of CAMs with their audit clients, the staff’s review of methodologies submitted by 10 U.S. audit firms that collectively audit approximately 85% of large accelerated filers, and other outreach efforts.

Review the staff guidance on the PCAOB's website.

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