By Terri Eyden
An Invitation to Comment: Improving the Auditor's Report (ITC) was released June 22 by the International Auditing and Assurance Standards Board (IAASB), seeking input on potential changes to improve the information provided in the auditor's report on financial statements.
In response, the AICPA's Auditing Standards Board (ASB)
is asking members to complete a survey - AICPA Auditing Standards Board - Improving the Auditor's Report
- to help inform the ASB's response to the ITC. The survey will be open through September 10, 2012, and can be accessed on the ASB website
The ASB has stated it "recognizes that the clarified standards will become effective within the next few months, including the revised standards for auditor reporting. However, in view of the ASB's commitment to converge its standards with those of the IAASB, the ASB is very interested in the direction the IAASB is moving related to this topic and the likelihood of changes to the standard audit opinion that the IAASB may propose."
The proposed improvements to the auditor's report that are included in the ITC would be "required for all entities, except for the proposed inclusion of auditor commentary which would only be required to be included by public interest entities (PIEs)," according to the ASB.
The IAASB's ITC suggests the following changes to auditor reporting:
- Additional information in the auditor's report to highlight matters that, in the auditor's judgment, are likely to be most important to users' understanding of the audited financial statements or the audit, referred to as "Auditor Commentary." This information would be required for PIEs - which includes, at a minimum, listed entities - and could be provided at the discretion of the auditor for other entities.
- Auditor conclusion on the appropriateness of management's use of the going concern assumption in preparing the financial statements and an explicit statement as to whether material uncertainties in relation to going concern have been identified.
- Auditor statement as to whether any material inconsistencies between the audited financial statements and other information have been identified based on the auditor's reading of other information, and specific identification of the information considered by the auditor.
- Prominent placement of the auditor's opinion and other entity-specific information in the auditor's report.
Through the survey, the ASB is seeking feedback on the ITC's questions for respondents on pages thirteen through fifteen. The survey also includes questions regarding the topics covered in the ITC to solicit US-specific feedback.
Depending on the amount of detail survey participants wish to share with the ASB, the survey should take ten to forty minutes. Before completing the survey, the ASB recommends that participants review the ITC