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Since my last report, the activities of the ASB have increased significantly. Of particular importance is the decision by the AICPA to base US auditing standards on the International Standards on Auditing (ISAs) issued by the International Auditing and Assurance Standards Board (IAASB).
The ASB has a number of significant projects in progress:
Risk Assessment
- In December 2002, the ASB approved an exposure draft consisting of a suite of seven proposed Statements on Auditing Standards related to the auditor
s risk assessment process. That exposure draft was a joint effort of the International Auditing and Assurance Standards Board (IAASB) and the ASB. The IAASB issued their ISAs in 2004.
- At its December 2004 meeting, the ASB concluded that the revised exposure drafts should be reexposed for comment.
- The ASB expects to vote to issue the revised exposure drafts in April 2005 with a 120-day exposure period, and to issue the final standards at the end of 2005, effective for audits beginning after December 15, 2006.
- This suite of standards will have a significant effect on audit practice and education.
Audit Documentation
- At its December 2004 meeting, the ASB voted to issue an exposure draft of a proposed SAS that would amend SAS No. 96, Audit Documentation.
Reporting on Internal Control Task Force
- Revising AT 501, Reporting on an Entity's Internal Control Over Financial Reporting
- The Audit Issues Task Force discussed the revision of AT 501 at its December 2004 meeting.
- Revising SAS N0 60, Communication of Internal Control Related Matters Noted in an Audit.
Use of a Specialist
- The ASB had been working on a specialist project that was sent to the IAASB for their consideration. The ASB fully expect them to take on the project and the ASB will work from their exposure draft.
Audit Report
- This task force is revising SAS No 58, Reports on Audited Financial Statements (AU sec. 508), in light of the International Auditing and Assurance Standards Board
s recently issued International Standard on Auditing, The Independent Auditor's Report on a Complete Set of General Purpose Financial Statements, and PCAOB Auditing Standard No. 1, References in Auditors' Reports to the Standards of the PCAOB.
Other topics that will be addressed by the ASB include:
- Clarity project.
- Audit materiality.
- Group audits/principal auditor.
- SAS No. 70 and Guide revisions.
- Related parties.
- Accounting estimates.
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