Some auditing standards have recently been improved in the areas of clarity and convergence with international standards.
This website is an excellent source for general information, ranging from the kind of information a non-CPA/auditor may need and containing enough information that a CPA/auditor needs to understand and prepare for the transition.
While some auditing standards (four in total) have already been clarified, converged and are effective today, most of the remaining standards will have an effective for periods ending on or after Dec. 15, 2012.
While issuing auditing standards is not unusual for the ASB, the significance of these three standards is considerable. These three standards represent substantial completion of the ASB’s Clarity-Convergence Project.
The project has been in process since 2004 and represents a huge commitment of time and effort by members of the ASB, task forces of the ASB and AICPA professional staff working with the ASB.
The “clarity” is related to the format of the auditing standards. “Convergence” is related to the fact the ASB wanted to address how to best carry out its mission after the creation of the Public Company Accounting Oversight Board (PCAOB) and the increasing global acceptance of International Standards on Auditing (ISAs).
The plan the ASB developed was to converge the AICPA ASB standards with the ISAs while avoiding unnecessary conflict with PCAOB standards.
The “clarity format” will have five parts:
- Application and Other Explanatory Material
This format creates a clear, consistent and easy-to-understand application of auditing standards.
Personally, I believe it is important to note that consistency within the standards and between the auditing standards used by other standard setters is extremely important.
I also believe that the establishment of a clear objective, for me as an auditor, to have both before and while evaluating specific audit procedures adds a needed element of specificity that can be quantitatively and qualitatively used and applied.
As auditors, we will now have to step back and evaluate what we planned to do, how we did it and ask ourselves if we achieved a result that provides sufficient and appropriate audit evidence.
Finally, while some auditors and financial statement users believe all we did as a result of this project is react to the international environment, I believe nothing is further from the truth.
The due process the ASB went through as a standards-setting body was incredible and included consulting with an extraordinarily large and valued range of experts such as those serving as members of the ASB during this period since 2004 and today, stakeholders or users of financial statements, regulatory agencies and organizations, members of the academic community and other standard auditing and accounting standards.
There is no question in my mind, as a profession, auditors and the public all will be better served as a result of this project to clarify and converge auditing standards established by the ASB.
Art Winstead is the Director of Accounting and Auditing Services for CPAmerica International. He has over 30 years of experience with Davenport, Marvin, Joyce & Co., LLP. He manages technical resources, engagement support, audit practice matters and reviews A&A publications for CPAmerica.