AICPA Invites Int'l Auditor Independence Comments

The International Federation of Accountants (IFAC) is proposing changes in international auditor independence standards that could significantly impact U.S. CPAs.

As an IFAC member, the AICPA routinely comments on the organization’s proposals and determines whether to revise its own Code of Professional Conduct to harmonize with international standards. IFAC’s exposure draft, issued on Dec. 29, 2006, contains auditor independence standards more restrictive than those of the AICPA. To address this, the AICPA is inviting CPAs to provide comments by the April 30 deadline – preferably well before that deadline.

The exposure draft’s more restrictive revisions reveal why input from CPAs in the United States is necessary. The draft extends the reach of IFAC’s independence rules — which currently govern only auditors of listed companies — to those who audit entities of significant public interest, such as large regulated financial institutions and possibly large pension funds and government agencies, as well as government-controlled and not-for-profit entities. Additionally, small firms that audit listed entities would no longer have flexibility and would be required to rotate partners on such engagements. Moreover, regardless of size, all firms would be required to rotate partners for audits of entities considered to be of significant public interest.

The AICPA is making every effort to ensure that IFAC’s final version is balanced and sensitive to the needs of smaller firms, but all CPAs should take part in the dialogue on these important independence issues.

You may like these other stories...

The Public Company Accounting Oversight Board (PCAOB) on Tuesday adopted a new auditing standard and amendments in three areas of the audit that could pose an increased risk of material misstatement in company financial...
Read more from Larry Perry here and in the Today’s World of Audits archive.In my last article, I presented an overview of one of the first steps in the preplanning phase of an audit engagement: reviewing prior year...
Read more from Larry Perry here and in the Today’s World of Audits archive.AU-C Section 800, Special Considerations—Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks (SPFs),...

Already a member? log in here.

Upcoming CPE Webinars

Oct 9In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards.
Oct 15This webinar presents the requirements of AU-C 600, Audits of Group Financial Statements (Including the Work of Component Auditors).
Oct 21Kristen Rampe will share how to speak and write more effectively by understanding your own and your audience’s communication style.
Oct 23Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.