41 posts categorized "Auditing" Feed

3 EBP audit considerations in 2021

Shutterstock_1647418087I’m sure many of us relate to the “one-year-later” pandemic fatigue prominently featured in the news. I’ve heard from several members about difficulties connecting with and supervising remote audit teams while dealing with life during a pandemic.

Because I once was an employee benefit plan auditor, I understand your pain. EBP auditors must know and adhere to U.S. auditing standards, plus follow additional U.S. Department of Labor requirements. There are many changes for the EBP auditor to master this year.

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Are you ready for these ESG trends?

Investors, customers and key stakeholders continue to seek reliable and transparent information on a variety of environmental, social and governance (ESG) metrics. The accounting profession Sustainability has a key role to play. Accountants within organizations play an important role in integrating critical business information; implementing and maintaining relevant processes and controls; making and enabling business decisions; and reporting to stakeholders in a holistic, integrated way. Public accountants play a critical role in providing assurance and advisory services to organizations to enhance confidence in the reported information. As influential members of almost every business, government and non-governmental organization, professional accountants are uniquely positioned to make a difference.

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COVID-19 challenges in commercial real estate audits

GettyImages-468759872Now that 2020 has concluded, many owners of commercial real estate are contending with the coronavirus pandemic’s impacts on their financial performance.

As auditors, you should recognize that the execution of financial statement audits for 2020 is going to be different from prior years, and the commercial real estate market brings with it a range of issues that you will have to be prepared for. You can expect many facets of a commercial real estate audit to feel the pandemic’s effects. The focus of this blog is on impairment considerations for commercial real estate properties.

You and your engagement team may want to make use of AICPA resources such as the COVID-19 audit toolkit and the COVID-19 accounting resources.

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Top audit challenges in 2021: peer reviewers weigh in

GettyImages-526703275“Same as last year?” Definitely not.

This year won’t be “business as usual” for auditors. Auditors are navigating a new revenue recognition standard and still dealing with pandemic-related disruptions. CPAs have worked hard to perform audits under uncertain circumstances since the pandemic began, and that work will continue this year.

The AICPA® will help you prepare for these changes so you can keep performing high-quality work. We talked to experts — more than 230 peer reviewers — about the challenges auditors are facing around revenue recognition and the current business environment. We’ve also identified resources that will help you audit successfully.

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How to audit during a pandemic? You asked. We answered.

GettyImages-655449204This year has been anything but conventional. As auditors prepare to audit clients who’ve found themselves financially affected by the pandemic, we’ve received many questions. To bring a little clarity in the time of COVID-19, this blog presents answers to the most frequently asked questions.

Is it possible and effective to audit remotely?

You’re not prohibited from conducting audit procedures remotely. Auditing standards generally specify what evidence must be collected, but not how it must be collected. In most cases, we can reliably gather audit evidence remotely.

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4 A&A challenges caused by COVID-19

IStock_43524178_XXLARGEFor many public companies, the financial reporting challenges brought on by the COVID-19 pandemic aren’t going to disappear anytime soon. They will continue through year-end, and probably at a minimum for a few quarters after that. We’ve been hearing about the following A&A issues from those of you in the trenches — finance professionals and firm practitioners — and many of these challenges will be discussed at the AICPA Conference on Current SEC and PCAOB Developments next week. Here are some of the topics I’m expecting we’ll hear about.  

  1. Impairment related to non-financial assets

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Auditing health-care entities affected by COVID-19

GettyImages-867204006 (2)It’s difficult to overstate COVID-19’s impact on the health-care industry. These changes vary dramatically among individual entities, meaning that there is no one-size-fits-all approach to auditing them. The audit risks vary widely.

Any health-care entity audit should start with a client meeting that covers several COVID-19 variables. They should include whether the client received federal funding, related financial statement implications, remote work arrangements and any furloughs or layoffs.

Here are major considerations to keep in mind during your audits.

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8 things to know about the audit evidence standard

GettyImages-956306692As we were finalizing Statement on Auditing Standards No. 142, COVID-19 arrived and caused major disruptions to the country’s economy, including changing the ways auditors were working. Automated tools and techniques — like conducting remote observation using cameras or drones — became necessary to perform certain audit procedures, such as observing the physical count of inventory. These and other automated tools and techniques are referenced in the guidance accompanying the audit evidence standard that was issued last month. After practitioners’ experiences over the past several months, these techniques likely will feel more familiar today than they did several months ago.

Before you dive in to read the standard, we’d like to highlight some key changes; the standard:

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Key risks when auditing a not-for-profit during the pandemic

GettyImages-182392061 (2)While COVID-19 has cast a cloud of uncertainty over not-for-profit organizations, there is one fact we can all hang our hats on: How we audit a not-for-profit now should look completely different than it did a year ago, a month ago, or even a few weeks ago.

As auditors, we’ve been fortunate to work in a stable environment for some time. The pandemic, however, has pulled the rug out from underneath all of us – and that includes our clients. Not-for-profits are not exempt, and COVID-19 has affected each one in drastically different ways.

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3 A&A tech tips for today’s virtual firm

TechyWith COVID-19 changing everyone’s world, firms must develop new ways to work internally and with clients. If you are used to going over the audit report with clients in the office, what’s your plan? If your audit team usually conducts the audit at the client’s office, what’s your plan?

Fortunately, technology enables firms such as yours to continue to offer personalized, exceptional service without being in the same physical space as your client. You don’t even need your team to be together in one office to deliver efficient, high-quality work.

What will it take to get it right in the long run? Here are three tips to get you going:

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A new technology solution for data-driven audits

GettyImages-534827625If you’re an auditor, you should be excited about the many opportunities that the digital era creates for your profession. Sue Coffey, CPA, CGMA, Executive Vice President, Association of International Certified Professional Accountants — Public Practice, and Erik Asgeirsson, President and CEO, CPA.com, share how the profession is reimagining the audit and what this means for you.

1. What’s changing in the audit area? What opportunities is technology bringing?

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Derivatives are back, but are the risks?

Shutterstock_744615220Mortgage-backed securities, credit-default swaps and derivatives were not much more than financial industry jargon until the recession of 2007. When the world economy nearly collapsed—due in part to mismanagement of and poor investment in complex financial instruments—those terms entered the mainstream.

The 2019 survey of business executives reveals that 59% of CPAs have complex financial instruments on their balance sheets. Of those, 28% said they expect complex financial instruments to take an even bigger percentage in the next three years. At the same time, 55% said they are concerned about the valuations of those investment vehicles, and 69% said they expect them to become even more complex, making them harder to value.

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Revenue recognition and independence: Something to consider

GettyImages-621032734Implementing the new revenue recognition standard is like climbing a mountain.

It’s a challenge. It has to be addressed since the standard is effective for private companies and many not-for-profits in calendar year 2019. It can be tedious to make sure systems are updated appropriately and staff is trained.

Sometimes your clients may get breathless through this exercise and feel discouraged, so they turn to you. As your clients’ management and accountants climb “Mount 606,” as I like to call it (named after the FASB ASC 606), they look to their CPA firms — you — for help up the summit.

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Advice from a peer reviewer: Documentation missteps to avoid

GettyImages-157399946In my 25 years as a peer reviewer, I’ve reviewed thousands of audits from a variety of firms. You may be surprised by how often I see errors related to a fundamental audit step: documentation.

Audit documentation is important to get right because it provides evidence to support your audit opinion. It’s also crucial for auditors to document their work if they are going to comply with generally accepted auditing standards (GAAS).

I’ve found that several documentation missteps trip up auditors more than others. Keep reading to find out what these errors are and how to avoid them.

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3 steps to prep for the new EBP audit standard

Shutterstock_314921831Last month, we issued a new statement on auditing standards (SAS) for employee benefit plan audits, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA. The SAS is designed to make the auditor’s report easier to understand and more relevant, leading to improved EBP audit quality.

If you perform financial statement audits of EBPs subject to ERISA, you’ll want to carefully review the changes and start planning for implementation well before the effective date

Here’s some advice to get you started.

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5 things you need to know about the new auditor reporting standards

GettyImages-172342448You may have heard that we issued a new auditor reporting standard effective for audits of financial statements for periods ending on or after December 15, 2020. The standard was designed to enhance the relevance and transparency of the auditor’s report. One key change is that with the new standard, the auditor’s opinion comes first. It’s like opening a box of Cracker Jack at a ball game and seeing the prize right on top. No need to fish through the rest of the good stuff in the box to find it.

The new Statement on Auditing Standards Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements, known as SAS No. 134, contains four sections that replace AU-C Sections 700, 705 and 706. There’s also a new section: 701 in the AICPA’s Professional Standards.

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Flip the switch on non-conformity with 5 free audit quality resources

IStock_85468875_XXXLARGEYou strive to perform top-notch audits of your clients’ financial statements. You research the company and their industry, meet with the client, gather necessary information and develop and execute a plan. Having resources on hand can streamline the process.

Five years ago, the AICPA formed its Enhancing Audit Quality (EAQ) initiative and changed how we develop resources to help auditors. The EAQ team, working with the Audit and Attest Standards, Peer Review, Engagement and Learning Innovation, Center for Plain English Accounting, and Assurance and Advisory Innovation teams, analyzes data from peer reviews and other sources, identifies where noncompliance with professional standards occurs and develops resources to help firms in those areas.  So far, we’ve focused on: risk assessment, internal control, audit documentation, employee benefit plan audits, peer review, quality control, single audits, SOC engagements and auditing accounting estimates.

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16 free learning opportunities to take advantage of this summer

Shutterstock_633002651It’s summertime. The days are getting longer, the temperature is warming up and your most hectic time of year — workwise — is behind you. Congratulations! Now you can relax, at least a little. Summer is also the perfect time to hone your skills in preparation for fall busy season. We’ve assembled a handful of our favorite free resources to help you brush up on your skills and add a few new ones to your toolbox.

Find your niche

Search for that new service offering you’re passionate about. Once you find it, study up and absorb all there is to know about it. Home in and focus so you can really master it and add it to your suite of services. Here are some ideas to get started:

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5 steps to get started with audit data analytics

GettyImages-629666944If your firm hasn’t started using audit data analytics yet, it’s time to get on board. Audit data analytics (ADAs) are a technique that can help you leverage current technologies and move toward a more data-driven approach to planning or performing an audit.

How? ADAs help you discover and analyze patterns, identify anomalies and extract other useful information from audit data through analysis, modeling and visualization. You can use ADAs to perform a variety of procedures to gather audit evidence.

What that means for you: You can focus more of your time and energy on analyzing your data, understand more of what’s happening at your client’s organization and often analyze an entire population of data instead of just a sample.

Getting started with new techniques and technologies can be overwhelming, especially if you’re comfortable with your traditional method—and you may have concerns about using ADAs while complying with audit standards. However, we have a few resources and tips to show how you can comply with the standards while performing your audits with ADAs. Get started with these five steps.

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The audit risk model: your first step in risk assessment

This blog post is the third in a series on risk assessment, a significant audit quality issue. View the first blog post here and the second here.

Rmm

The audit risk model is the foundation of any audit. This might seem like CPA 101, but are you correctly applying it to your engagements?

In doing so, your first consideration is your client’s risks of material misstatement (RMM), which is made up of inherent risk and control risk. As a reminder, inherent risk is the risk of material misstatement assuming no related controls, while control risk is the risk that your client’s controls won’t prevent or detect and correct a material misstatement. So how do you apply this to your audit?

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Evolving tech could mean evolving the CPA license

Shutterstock_1023191287Throughout 2018, you heard a lot about the changing accounting profession. The biggest driver behind all this change? Technology—what it can do for us (or to us), how to use it and the opportunities and challenges it presents.

We’re using emerging technologies to deliver our core services more effectively and efficiently, and we’re evolving the services we offer to better meet the public’s, our clients’ and our employers’ needs in a technology-driven marketplace.

And so, a couple of questions arise: Are the public, our clients and our employers better served if the CPA license and licensure process evolve to better reflect the changing marketplace? If yes, what does that look like? The National Association of State Boards of Accountancy (NASBA) and the AICPA have joined forces with state regulators, state societies, practitioners and other stakeholders to figure it out.

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No more hitting the snooze button on revenue recognition

Shutterstock_549102646We realize you’re busy, but that doesn’t mean you can keep hitting the snooze button on the Financial Accounting Standards Board’s (FASB) accounting standards that will soon come into effect for everyone. The accounting standard that needs your attention right now is the new revenue recognition model, issued as FASB ASU 2014-09 with subsequent amendments.

Public entities are well underway with adoption of the new revenue recognition standard, as the new guidance is effective for interim and annual periods in 2018. Private companies still have some time as the guidance is effective in 2019 for annual reporting periods, and in 2020 for interim periods. This is a wakeup call, and not an opportunity to hit the snooze button yet again.

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3 lessons “It’s a Wonderful Life” can teach you about revenue recognition

Shutterstock_236107438What happens when a small business fails to comply with important regulations? In the classic movie It’s a Wonderful Life, a local building and loan association is in danger of failing its bank audit because of a major—but innocent—mistake by one of its officers. Are your clients in the same kind of danger as Bailey Building & Loan?

They could certainly face unnecessary disruptions if they underestimate the impact of the significant new Financial Accounting Standards Board (FASB) revenue recognition standard and aren’t ready to tackle implementation as the rules become effective. (FASB Topic 606 is effective for nonpublic entities for annual reporting periods beginning after December 31, 2018.) Here are three lessons the movie can teach practitioners and clients before it’s too late.

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40 trends that the Auditing Standards Board has outlived

Shutterstock_1023868339Everyone gets pretty nostalgic on their fortieth birthday. But what if you are the Auditing Standards Board? How would you celebrate? We decided to take a light-hearted look at the trends that have come and gone over the last four decades. Join us for this ride back in time.

 Communications. In 1978, auditors didn’t have smartphones to communicate with clients. They used CB radios. Before long, the shorter car phone antenna became the status symbol of choice. Away from the car? Just page me (on my beeper). Motorola introduced a game changer in 1990: the bag phone. Soon, tech savvy CPAs were carrying a bag phone in one hand and a PalmPilot phone in the other. Fortunately, someone saw one of these CPAs in an airport and invented the Blackberry.

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Wine, cheese and revenue recognition for everyone

Shutterstock_1081684592If you think the Financial Accounting Standards Board’s (FASB) new revenue recognition standard is only applicable to those in the wine and cheese crowd, think again. The standard impacts companies of all sizes, from specialty shops to corporate lenders. You don’t need to be in an industry with specialized revenue to turn your attention to the new standard. At the Center for Plain English Accounting, we’ve been receiving questions from practitioners on their client’s behalf for some time now. We picked out a couple and provided answers to help you understand the new standard (ASC 606).

How to identify performance obligations under the new standard.

Question: My client runs a direct sales gourmet cheese business. Individuals who join the Cheese Club pay a monthly membership subscription fee of $49.95 and receive $49.95 each month in “Mozzarella Moola” to spend whenever they please. Members of the Cheese Club also receive 25% off all purchases and receive exclusive early access to purchase new products. In this scenario, what are the performance obligations?

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4 tips to identify audit client risks

Shutterstock_729823828This blog post is the second in a series on risk assessment, a significant audit quality issue. View the first blog post here

Anyone who owns a home has had some experience with lawn care. Maintaining a healthy lawn is easy when you have a lush field of bluegrass, but when things start to get patchy, that’s where the real work comes in. That’s when you have to get a good understanding of what is going on with your lawn and what might be causing the patches. Only then can you pick the right treatment.

Auditing a set of financial statements is no different. To perform an effective audit, you must first gain an understanding of your client and identify their specific financial reporting risks. Until these steps are complete, you have no basis for planning the rest of your audit procedures.

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5 cybersecurity frameworks accountants should know about

Shutterstock_797485732You’ve seen all the news stories: Cyberattacks are happening almost daily, and they can have devastating consequences. You know you need to protect your organization’s data. But where do you even start?

A cybersecurity framework can guide you in the right direction. These frameworks help you design a cybersecurity risk and controls process that is right for your organization. Whether you’re interested in helping set up your own organization’s cyber program, or you’re interested in providing assurance on other organizations’ cybersecurity systems, you should be familiar with different cybersecurity frameworks and what types of companies they’re best for. I’ve listed a few common ones you should know about below.

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Yellow Book meets yellow cake and all sorts of delicious changes

Shutterstock_145838096While I’m not a good baker, when I talk to CPAs who are new to the governmental auditing area and need to understand what the “Yellow Book” is, I often explain using the analogy of a multi-layered cake. The bottom layer of the cake is the AICPA auditing standards, which are the basis for most Yellow Book audits. The second layer of the cake (let’s make it a yellow layer!) adds standards issued by the Government Accountability Office (GAO), known as the “Yellow Book” or Generally Accepted Government Auditing Standards (GAGAS) that build upon the AICPA rules. Finally, if your client gets federal funds, there may be a third layer of the cake that consists of compliance auditing requirements.

The big news for auditors right now is that the GAO has issued a 2018 revision to the Yellow Book which will change the ingredients for the middle layer of the cake. If you audit federal, state or local governments, or not-for-profits, whose audits are subject to the Yellow Book, you should begin updating your recipe card so your cake turns out right. 

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Three things your firm needs to get started with SOC services

Shutterstock_611298710In an era of near-daily cyberattacks, organizations increasingly need to show they are protecting sensitive data—and they are turning to CPAs to help them do so.

SOC reporting isn’t something auditors should learn on the job or figure out as they go, though. If you’ve been thinking about expanding your firm’s offerings to include Service and Organization Control (SOC) engagements, there are a few things you need first.

  1. You need to be knowledgeable in the service area

Specialized knowledge of an industry or organization is vital for understanding where risks are, assessing those risks and adjusting procedures to the appropriate risk level. As such, focus your SOC practice on areas with which you are already familiar.

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Why assess audit risk? So you don’t get lost in the woods

Risk 3Picture this: You’ve finally made it through busy season. You’ve booked a family trip to a remote cabin in the mountains to unplug and relax. Your out-of-office message has been turned on and you’ve planned plenty of outdoorsy activities for you and your family. You’ve written out a packing list and checked off every item: Clothes? Check. Hiking boots? Check. Bug spray? Check. Snacks and entertainment to ward off your kids’ boredom- and hunger-related complaints during the long car ride? Check.

The car’s all packed, everyone’s buckled in and your GPS is set up on the dashboard. Now that you’re ready to embark on a journey to the middle of nowhere, you reach for your GPS…

…and throw it out the window.

Probably not the best way to get where you need to go, right?

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These tools can automate parts of your audit

GettyImages-850496336You’ve heard a lot about data analytics. But do you know how to use them to automate parts of your audit? From journal entry testing to inventory counts, a new AICPA mapping guide shows you how data analytic products on the market today align with general audit procedures.

The free Audit Data Analytics to Audit Procedures mapping document provides a direct link for nearly 100 audit procedures, covering areas like risk assessment, journal entries, accounts receivable, inventory, intangibles, accounts payable, income taxes, and more.

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SOC 2 reports get an update

SOC 2 updatesSOC 2® standards have been updated. If you perform these engagements, you need to check out the recently updated SOC 2 guide to make sure you are performing these services according to AICPA standards.

Released last month, the updated guide is a “how to” for service auditors performing SOC 2 examinations to report on a service organization’s system controls relevant to security, availability, processing integrity, confidentially, or privacy. There are three major updates practitioners will want to pay attention to:

  1. Alignment with clarified attestation standards
    The guide conforms with the updated SSAE No. 18 (Clarified Attestation Standards) – meaning it is a vital tool for practitioners to use in developing standards-compliant reports. For example, it includes updated information on requirements related to requesting written assertions and performing risk assessments.

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4 new opportunities blockchain could create for auditors

Blockchain 2In case you haven’t heard, blockchain technology has the potential to change the auditing profession. A new whitepaper co-authored by the American Institute of CPAs details what opportunities could emerge for auditors.

Not sure what blockchain is? Don’t worry, you’re not alone. It’s a digital, distributed ledger that contains every transaction since its creation. Once transactions are entered, they can’t be changed or deleted. Every user on a blockchain has an identical version of the ledger, and all copies are updated automatically when a new transaction occurs. Each entry refers back to the previous entry across all versions, creating a “chain” of information.

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Start your audit off right with data analytics

When planning an audit, how do you approach your preliminary analytics? Many auditors perform a variance analysis. They compare current year account balances to the prior year to identify any unexpected fluctuations. While this procedure often yields relevant insights, did you know performing audit data analytics (ADAs) can be even more effective at identifying potential problem areas? ADAs can be quick and painless, and you probably already have the tools on hand to perform them.

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Blockchain was made to solve 1 problem. Here’s what that is.

Blockchain“Blockchain is a solution looking for a problem. Unless you want to buy drugs on the internet,” said the instructor in a technology training I recently attended.

While not the first time I had heard such a comment, it was disturbing that a hundred of my fellow practitioners were being misled. Ignoring or dismissing blockchain does the accounting profession no favors. Instead, let’s consider the problem that the technology solves. This will provide a basis for later understanding possible applications to our work.

 What is the problem blockchain is trying to solve?

Blockchain, or distributed ledger technology, set out to solve how we transfer a digital asset between two peers without an intermediary. While there are many applications of this transfer, let’s look at it in the context of money.

Imagine you are selling a bike online. You don’t actually know the person who is buying your bike, so you have no way of knowing if the buyer actually has the money to pay for it. You have to trust an intermediary like PayPal for this information. PayPal is crucial to the transaction because it verifies what you cannot – whether the buyer has enough money in their bank account to make the purchase.

The asymmetry of trust in this transaction is known as the Byzantine General’s Problem. Imagine we have four generals planning to attack a city. At least three of the generals must attack at the same time to overpower the army holding the city. However, the only way they can communicate with each other is via messenger, and they do not know if one of the generals is a traitor. If a general were traitorous, he could modify the attack message and cause the other generals to fail. The only way to overcome a traitorous general is to provide the history of all messages sent and evidence they have not been altered. If the generals see that one of their peers has sent a message different from the others, they would know the general is traitorous and disregard his message. If more generals are good actors than bad in this attack, the correct message will be obvious.

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7 proposed changes to the auditor’s report

Auditor's reportAn auditor’s report gives lenders confidence that financial statements are free of material misstatement. But does the auditor’s report really tell the story of what the auditor did to gain assurance about the financial statements? Thanks to proposed changes to the auditor’s report, readers will gain a better understanding of what the auditor did and observed.

The AICPA Auditing Standards Board (ASB) has released a set of exposure drafts  aimed at enhancing the relevance and usefulness of the auditor’s report.

  1. Proposed Statements on Auditing Standards: Auditor Reporting and Proposed Amendments―Addressing Disclosures in the Audit of Financial Statements
  2. Proposed Statement on Auditing Standards: The Auditor’s Responsibilities Relating to Other Information Included in Annual Reports
  3. Proposed Statement on Auditing Standards: Omnibus Statement on Auditing Standards—2018

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4 financial benefits of single audit specialization

Focus on audit specializationCan a small firm thrive by building a niche within a highly specialized audit area? My firm, Clausell & Associates, P.C., in Decatur, Georgia, has found the answer is a resounding “yes.”

Our 10-person firm opened in 1987, three years after Congress passed the Single Audit Act. This landmark legislation standardized audit requirements for states, local governments and Indian tribal governments that receive and use federal financial assistance. Our firm’s founders saw an opportunity to establish themselves in this new and growing niche. Today, single audits make up about 60 percent of our practice, so the original decision to specialize in single audits was a great move for our firm. 

For practitioners thinking that specializing may limit their practice, don’t worry. Over the years, our single audit expertise has helped to set us apart in the marketplace and drive our growth. Here are some of the rewards that we have found through single audit specialization. 

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You asked, we delivered. A more flexible attestation standard.

SlinkyWe heard from members. Their clients want them to perform procedures and report in a format similar to an agreed-upon procedures (AUP) engagement, with more flexibility. To be responsive to the needs of our members and the public, the AICPA Accounting and Review Services Committee (ARSC), got together with the Auditing Standards Board (ASB) and developed a new proposed standard, Selected Procedures. If adopted, it will address several practice issues that CPAs are experiencing today and result in a standard that is in the public interest.

Development of the procedures

In an AUP engagement:

  • The CPA performs procedures that are established by specified parties.
  • The specified parties are responsible for the sufficiency of the procedures for their purposes.
  • The engagement letter is required to include agreement on the procedures.
  • In circumstances where the procedures evolve or are modified over the course of the engagement, the CPA is required to amend the engagement letter to reflect the modified procedures.
  • The practitioner’s report is restricted to the use of those parties that established and agreed on the sufficiency of the procedures

In practice, many CPAs find that the specified parties are unable or unwilling to develop the procedures needed.

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The trait that will prevent robots from stealing your job

RobotsLet’s face it. Artificial intelligence (AI) is going to revolutionize our business environment and the profession. Advancements in AI mean that you will soon spend less time conducting time-consuming and repetitive tasks. However, just because a robot can perform certain tasks traditionally performed by a CPA, does not mean that a robot is going to steal your job. That is because humans possess traits vital to our work that robots just don’t have the bandwidth to handle. One of the most essential traits is professional skepticism.

According to the AICPA Professional Standards, professional skepticism is an attitude that includes a questioning mind, being alert to conditions that may indicate possible misstatement due to fraud or error and a critical assessment of audit evidence. It is a necessary trait that all auditors must have, and is expected of all CPAs. Here are six tips to help you enhance your professional skepticism.

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Why I’m #AuditorProud: Auditors Are Protectors

AuditorProud_2017Auditors have always played an important role in society. We validate information that helps citizens understand how towns and school districts manage their tax dollars. We assist small business owners in getting the financing they need to grow. We provide assurance on the information investors use to make decisions on where best to invest for their futures.

And as communities’ needs have grown, so too have the services auditors provide. Below are just three ways auditors have evolved the way they serve the public – and three reasons why I am proud to represent the auditing profession.

Evaluating Risk Management Programs Designed to Protect Sensitive Information

Businesses big and small are faced with cyberattacks every single day. The Equifax breach affected nearly one-third of the US population, while attacks like WannaCry and Petya impacted millions of people worldwide.

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Key Facts about a New SAS on Exempt Offerings

SAS 133A municipal government issues a bond offering after the audit report date. Or a franchisor is getting ready to prepare its annual update to its franchise disclosure document. What are the auditor’s responsibilities in each case? Practitioners with governmental clients are probably familiar with long-standing guidelines to address involvement with municipal securities offerings, however a recently issued auditing standard expands those best practices into required guidance for all exempt offerings.  

What’s the Background?

The Auditing Standard Board’s Statement on Auditing Standards (SAS) No. 133, Auditor Involvement With Exempt Offering Documents, applies to exempt securities or franchise agreements when the auditor is involved. The Securities and Exchange Commission (SEC) oversees a significant regulatory framework for publicly traded offerings, setting rules on what types of information and documents must be filed and when, and on auditor involvement. Some offerings, such as municipal securities, franchise offerings, crowdfunding, and short-term commercial paper with a maturity of nine months or less, are exempt from SEC registration rules. Exhibit A in the new SAS includes a list of exempt offerings.

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