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20 Jun 2023

Navigating the Auditing Standards Board (ASB): Guidelines for Certified Public Accountants

Categories Sarbanes–Oxley Act

Auditing Standards Board (ASB)

The Auditing Standards Board (ASB) plays a crucial role in setting guidelines and rules for certified public accountants (CPAs) in conducting audits and attestations. As part of the American Institute of Certified Public Accountants (AIPCA), the ASB is committed to serving the public interest by developing comprehensive standards and practice guidance for CPAs. Here’s what you need to know:

Key Takeaways:

  • The ASB issues auditing, attestation, and quality control statements, standards, and guidance to CPAs.
  • It establishes generally accepted auditing standards (GAAS) for non-public companies.
  • The board consists of 19 members representing various segments of the accounting industry.
  • Any rules or pronouncements require a two-thirds approval threshold from ASB members.

Understanding the Auditing Standards Board (ASB): The Auditing Standards Board (ASB) is a senior technical committee of the AIPCA, serving as the highest authority in establishing auditing standards in the U.S. Since its establishment in 1978, the ASB has been responsible for auditing, attestation, quality control, reporting, and performance monitoring. Its primary aim is to improve existing and enable new audit and attestation services, ensuring that accountants adhere to the set rules.

Following the introduction of the Sarbanes-Oxley (SOX) Act of 2002, the ASB gained control over standards and guidance for CPAs conducting audits for non-public companies. Meanwhile, the Public Company Accounting Oversight Board (PCAOB) and the Securities and Exchange Commission (SEC) took charge of auditing practices for public companies trading on the stock market.

Special Considerations:

Rulemaking Process:

  • ASB discusses pronouncements internally, involving the AICPA and sometimes the public.
  • They may hold public hearings and prepare exposure drafts of final rules.
  • Two-thirds approval from ASB members is required for the adoption of rules.

Membership Structure:

  • The ASB consists of 19 members nominated by the director of the AICPA Audit and Attest Standards Staff.
  • Nominees must be approved by the AICPA Board of Directors.
  • Membership is diverse, representing various segments of the accounting industry, including the “Big Four” accounting firms, local and regional accounting firms, NASBA representatives, and other public accountants such as academics and government auditors.

For more information, please refer to the following resources:

Websites and Online Resources:

  1. American Institute of Certified Public Accountants (AICPA) – Auditing Standards Board (ASB) – Link
  2. Public Company Accounting Oversight Board (PCAOB) – Link

Books:

  1. “Auditing and Assurance Services” by Alvin A. Arens, Randal J. Elder, Mark S. Beasley – Link
  2. “The Audit Process: Principles, Practice and Cases” by Iain Gray, Stuart Manson – Link

Academic Journals and Research Papers:

  1. “The Impact of the Sarbanes-Oxley Act on Auditing” by Rani Hoitash, Udi Hoitash, and Ya-Wen Yang – [Link](https://www.sciencedirect.com/science/article/pii/S105752

Websites and Online Resources:

  1. American Institute of Certified Public Accountants (AICPA) – The official website of the AICPA provides information about the Auditing Standards Board (ASB) and its guidelines.
  2. Public Company Accounting Oversight Board (PCAOB) – The PCAOB website offers insights into auditing practices for public companies and their relationship with the ASB.

Books:

  1. Auditing and Assurance Services by Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan – This comprehensive textbook covers auditing standards, including those established by the ASB.
  2. The Sarbanes-Oxley Act: Overview, Analysis, and Implications by J. Edward Ketz – This book explores the Sarbanes-Oxley Act of 2002 and its impact on auditing standards and the role of the ASB.

Academic Journals and Research Papers:

  1. The Accounting Review – A leading academic journal that publishes research on auditing standards, including articles related to the ASB.
  2. Journal of Accountancy – This professional journal features articles discussing auditing standards and updates from the ASB.

Reports and Studies:

  1. Audit Trends and Developments – An annual report published by a reputable accounting firm, providing insights into emerging trends and developments in auditing, including ASB-related updates.
  2. Research Report: The Impact of Auditing Standards – A research report analyzing the impact of auditing standards, including the role of the ASB, on audit quality and investor confidence.

Professional Organizations and Associations:

  1. Association of International Certified Professional Accountants (AICPA) – The AICPA offers resources and updates on auditing standards through its membership and professional development programs.
  2. National Association of State Boards of Accountancy (NASBA) – NASBA provides information and resources on auditing standards and their implementation across different states.