Clarified Auditing Standards and PCAOB Standards

Transcription

1 Clarified ing Standards and PCAOB Standards 177 Appendix B Clarified ing Standards and PCAOB Standards The auditing content in this guide focuses primarily on generally accepted auditing standards issued by the ing Standards Board (referred to as the clarified standards herein), and is applicable to audits of nonissuers. s of issuers are performed in accordance with Public Company Accounting Oversight Board (PCAOB) standards. This appendix was developed to assist in comparing the clarified standards, many of which are referenced throughout this guide, to the PCAOB standards. This appendix identifies PCAOB standards, or sections of PCAOB standards, that broadly correspond with the clarified standards. However, the underlying content within the clarified standards and PCAOB standards may not be analogous. Readers should review the full text of the corresponding PCAOB standards, review the related releases (available in the AICPA s publication PCAOB Standards and Related Rules or at and use professional judgment to identify all guidance applicable to their engagements. Note: The appendix that follows is prepared for informational and reference purposes only. It has not been reviewed, approved, disapproved, or otherwise acted on by the PCAOB or any senior committee of the AICPA and does not represent official positions or pronouncements of the PCAOB or the AICPA. & Accounting Guide: Entities With Oil and Gas Producing Activities, First Edition. AICPA American Institute of Certified Public Accountants, Inc. Published 2014 by John Wiley & Sons, Inc.

2 178 Entities With Oil and Gas Producing Activities No. ***, Overall Objectives of the Independent or and the Conduct of an in Accordance With Generally Accepted ing Standards Terms of Engagement Quality Control for an Engagement Conducted in Accordance With Generally Accepted ing Standards Documentation AU 110 AU 150 AU 201 AU 210 Responsibilities and Functions of the Independent or Generally Accepted ing Standards Nature of the General Standards Training and Proficiency of the Independent or AU 220 Independence AU 230 Due Professional Care in the Performance of Work AS 8 Risk Communications Between AU 315 Predecessor and Successor ors [1] AS 16 AU 161 AS 7 AS 10 AS and.14 Communications with 5 7 Committees [2] The Relationship of Generally Accepted ing Standards to Quality Control Standards Engagement Quality Review Supervision of the Engagement Documentation

3 Clarified ing Standards and PCAOB Standards 179 No. ***, Fraud in a Statement Laws and Regulations in an of The or s Communication With Those Charged With Governance Communicating Related Matters Identified in an Planning an AU 316 AS 12 AS 13 AS 14 AU 317 AS 16 AU 325 Fraud in a Statement An of Over of [4] Identifying and Assessing Risks of Material Misstatement [5] The or s Responses to the Risks of Material Misstatement [6] Evaluating Results [7] Illegal Acts by Clients Communications with Committees [2] Communications About Control Deficiencies in an of An of Over of [4] AS 9 Planning [8] , 56 58, and and d, 9, 20 23, and except paragraphs and except paragraphs (continued)

4 180 Entities With Oil and Gas Producing Activities No. ***, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement Materiality in Planning and Performing an Performing Procedures in Response to Assessed Risks and Evaluating the Evidence Obtained Considerations Relating to an Entity Using a Service Organization Evaluation of Misstatements Identified During the AS 12 Identifying and Assessing Risks of Material Misstatement [5] AS 15 Evidence [9] AS 11 AU 330 AS 13 AS 14 An of Over of [4] Materiality in Planning and Performing an [10] The Confirmation Process [12] The or s Response to the Risks of Material Misstatement [6] Evaluating Results [7] AS 15 Evidence [9] AU 324 AS 14 Service Organizations Evaluating Results [7] 500 Evidence AS 15 Evidence [9] except paragraphs 52 53, 56 58, and Paragraph 20 except paragraph except paragraphs 7 and , 4e f, 19, and b, 10 12, and except paragraphs and 22 28

5 Clarified ing Standards and PCAOB Standards 181 No. ***, AU 331 Inventories ing Derivative AU 332 Instruments, Hedging Activities, and Investments in Securities Evidence Specific Considerations for Selected Items External Confirmations Opening Balances Initial Engagements, Including Reaudit Engagements Analytical Procedures AU 337 AU 901 AU 330 AU 315 AU 329 AS 14 Inquiry of a Client s Lawyer Concerning Litigation, Claims, and Assessments Public Warehouses Controls and ing Procedures for Goods Held The Confirmation Process [12] Communication Between Predecessor and Successor ors [1] Substantive Analytical Procedures Evaluating Results [7] except paragraphs except paragraphs and.14 4a and Sampling AU 350 Sampling ing ing Fair Accounting Value AU 328 Estimates, Measurements and 540 Including Fair Value Disclosures [13] ing Accounting Estimates, and AU 342 Accounting Estimates Related Evaluating AS 14 Disclosures Results [7] except paragraphs and Related Parties AU 334 Related Parties (continued)

6 182 Entities With Oil and Gas Producing Activities No. ***, Subsequent Events and Subsequently Discovered Facts The or s an Entity s Ability to Continue as a Going Concern Written Representations Omitted Procedures After the Report Release Date AU 530 AU 560 AU 561 AU 341 AU 328 AU 333 AU 560 AU 390 Reports on ed [14] Dating of the Independent or s Report [15] Subsequent Events [16] Subsequent Discovery of Facts Existing at the Date of the or s Report An of Over of [4] The or s an Entity s Ability to Continue as a Going Concern ing Fair Value Measurements and Disclosures [12] Management Representations Subsequent Events [16] An of Over of [4] Omitted Procedures After the Report Date except paragraph.12e Paragraph.12e 75 77

7 Clarified ing Standards and PCAOB Standards 183 No. ***, Special Considerations s of Group (Including the Work of Component ors) The or s the Internal Function in an of Using the Work of an or s Specialist AU 543 Reports on ed [14] Part of Performed by Other Independent ors AS 9 Planning [8] AS 11 AS 12 AU 322 AU 336 Materiality in Planning and Performing an [10] Identifying and Assessing Risks of Material Misstatement [5] The or s the Internal Function in an of An of Over of [4] Using the Work of a Specialist Paragraph 10 Paragraph (continued)

8 184 Entities With Oil and Gas Producing Activities No. ***, Forming an Opinion and Reporting on Modifications to the Opinion in the Independent or s Report Emphasis-of- Matter and Other Matter in the Independent or s Report Consistency of Other Information in Documents Containing AU 410 AU 411 AU 530 AS 14 AS 6 AU 550 Adherence to Generally Accepted Accounting Principles The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles Reports on ed [14] Dating of the Independent or s Report [15] An of Over of [4] Evaluating Results [7] Reports on ed [14] An of Over of [4] Reports on ed [14] Reports on ed [14] Evaluating Consistency of Other Information in Documents Containing.01.09,.27.28,.65.66,.68,.70, and and , 4c, and ,.20.26,.29.32,.35.52,.58.64,.67, and ,.19,.69, and and.53.57

9 Clarified ing Standards and PCAOB Standards 185 No. ***, ed Supplementary Information in Relation to the as a Whole Required Supplementary Information Special Considerations s of Prepared in Accordance With Special Purpose Frameworks Special Considerations s of Single and Specific Elements, Accounts, or Items of a Statement Reporting on Compliance With Aspects of Contractual Agreements or Regulatory Requirements in Connection With ed Engagements to Report on Summary AS 17 AU 558 AU 544 AU 623 AU 623 AU 623 AU 552 ed ing Supplemental Information Accompanying ed Required Supplementary Information Lack of Conformity With Generally Accepted Accounting Principles Special Reports [17] Reports on ed [14] Special Reports [17] Special Reports [17] Reporting on Condensed and Selected Data and (continued)

10 186 Entities With Oil and Gas Producing Activities No. ***, Alert That Restricts the Use of the or s Written Communication Prepared in Accordance With a Reporting Framework Generally Accepted in Another Country Reports on Application of Requirements of an Reporting Framework Letters for Underwriters and Certain Other Requesting Parties Filings With the U.S. Securities and Exchange Commission Under the Securities Act of 1933 Interim Information Compliance s AU 532 AU 534 AU 625 AU 634 AU 711 AU 722 AU 801 Restricting the Use of an or s Report Reporting on Prepared for Use in Other Countries Reports on the Application of Accounting Principles Letters for Underwriters and Certain Other Requesting Parties Filings Under Federal Securities Statutes Interim Information Compliance ing Considerations in s of Governmental Entities and Recipients of Governmental Assistance Legend: [n] Bracketed number indicates a PCAOB standard that broadly corresponds to more than one clarity standard.

11 Clarified ing Standards and PCAOB Standards 187 Footnotes: * These standards are codified in AICPA Professional Standards and referenced by section numbers within the codification. ** In April 2003, the PCAOB issued Rule 3200T, Interim ing Standards (AICPA, PCAOB Standards and Related Rules, Select Rules of the Board), which adopted, on an interim transitional basis, generally accepted auditing standards of the AICPA ing Standards Board (ASB) that were in existence on April 16, These adopted standards are referred to as interim auditing standards. Since the adoption of the interim auditing standards, the PCAOB has issued new standards that, collectively, have superseded certain interim standards and amended the majority of the remaining interim auditing standards to varying degrees. Consequently, the PCAOB s existing auditing standards consist of new standards issued by the PCAOB and the remaining interim standards that the PCAOB has not superseded. In April 2013, the PCAOB issued a proposal to reorganize the PCAOB s existing auditing standards. The reorganization would put the existing standards into a topical structure with a single integrated numbering system, and could also withdraw certain interim standards. Appendix 3 of the proposal includes a comparison of the proposed framework for reorganization of PCAOB auditing standards to existing PCAOB auditing standards and the standards of the International ing and Assurance Standards Board and the ASB. Readers should remain alert for further developments on this project, which can be accessed through the PCAOB website at *** This column utilizes the designation AS for each PCAOB auditing standard and AU for each PCAOB interim standard. 404 of the Sarbanes-Oxley Act requires a public entity s independent auditor, registered with the PCAOB, to attest to management s disclosures regarding the effectiveness of its internal control. PCAOB ing Standard No. 5, An of Over Integrated with An of (AICPA, PCAOB Standards and Related Rules, ing Standards), establishes requirements and provides direction that applies when an auditor is engaged to perform an audit of management s assessment of the effectiveness of internal control over financial reporting that is integrated with an audit of the financial statements. When an auditor is engaged to perform similar attestation procedures for a nonpublic entity, the auditor would follow the requirements and guidance found in AT section 501, An Examination of an Entity s Over Integrated With an of Its (AICPA, Professional Standards). Although no direct correlation exists between PCAOB ing Standard No. 5 and the clarified standards because ing Standard No. 5 is associated with integrated audits and clarified standards are associated with financial statement audits (non-integrated), ing Standard No. 5 does contain certain requirements that generally correspond to concepts addressed in certain clarified standards. A reader conducting an integrated audit in accordance with PCAOB standards may be interested in these generally corresponding concepts and topics and, therefore, they are included within this appendix. The term all, as utilized within this column, indicates that the majority of the content within the referenced PCAOB standard broadly corresponds with the related clarified standard. However, the same PCAOB standard may also contain certain specific topics, sections or paragraphs that do not correspond with the related clarified standard, despite the use of the term all. (continued)

12 188 Entities With Oil and Gas Producing Activities ing Standard No. 16, Communications with Committees (AICPA, PCAOB Standards and Related Rules, ing Standards), is effective for audits of fiscal years beginning on or after December 15, 2012, that are performed in accordance with PCAOB standards. ors should continue to follow the interim standards AU section 310, Appointment of the Independent or, and AU section 380, Communication with Committees, (AICPA, PCAOB Standards and Related Rules, Interim Standards), for audits for which ing Standard No. 16 is not yet effective. See footnote. PCAOB Standards With No Corresponding Clarified Standard PCAOB Standards No. Discussion AU 504 Association With This PCAOB interim standard provides guidance to an accountant associated with the financial statements of a public entity s financial statements that the auditor has been engaged to audit in accordance with generally accepted auditing standards. Although maintained by the PCAOB, the ASB withdrew this standard during clarification of the standards and addressed its content related to audits of nonissuers through amendments to the on Standards for Accounting and Review Services (to the extent needed) and sections 200, 230, 260, 705, and 915. AS 1 AS 4 References in or s Reports to the Standards of the Public Company Accounting Oversight Board Reporting on Whether a Previously Reported Material Weakness Continues to Exist This PCAOB auditing standard requires registered public accounting firms to include in their reports on engagements performed pursuant to the PCAOB s auditing and related professional practice standards a reference to the standards of the PCAOB. This PCAOB auditing standard establishes requirements and provides direction that applies when an auditor is engaged to report on whether a previously reported material weakness in internal control over financial reporting continues to exist as of a date specified by management. This standard establishes a stand-alone engagement that is entirely voluntary, performed only at the company s request.