The Auditing Standards Board (ASB) of the American Institute of Certified Public Accountants, which issues standards for audits of nonissuers in the United States, has undertaken a significant effort to make U.S. generally accepted auditing standards (GAAS) easier to read, understand, and apply. This endeavor is similar to a project of the International Auditing and Assurance Standards Board that aims to clarify its International Standards on Auditing (ISAs). The ASB’s plan is to converge U.S. GAAS with the ISAs while avoiding unnecessary conflict with the standards of the Public Company Accounting Oversight Board.
Over the next two to three years, the ASB will redraft all of the auditing sections in the Codification of Statements on Auditing Standards, converging the material with the ISAs and applying the following clarity drafting conventions:
- Establishing objectives for each of the standards;
- Including a definitions section, where relevant, in each standard;
- Separating requirements from application and other explanatory material;
- Numbering application and other explanatory paragraphs using an “A” prefix and presenting them in a separate section;
- Using formatting techniques, such as bulleted lists, to enhance readability; and
- Including special considerations relevant to audits of governmental audits and audits of smaller, less complex entities.
The ASB proposes that all redrafted standards will be effective on the same date. The effective date is expected to apply to audits of financial statements for periods beginning no earlier than December 15, 2010.
Further information about the ASB’s plans with respect to clarity and convergence is available at http://www.aicpa.org/download/auditstd/ASB_Clarity_%20and_Convergence_(8.5x11).pdf. |
