Current Issues in Accounting

US Auditing Standards

ACT 525-26259 and Assignment #6

Amna Zafar Malik

Professor Richard Arenz

February 15, 2015

        In year 2004, the Auditing Standards Board (ASB) initiated a meaningful endeavor to make U.S. GAAS easier to study, interpret, and practice. On the other hand, in year 2009, International Auditing and Assurance Standards Board (IAASB) built an analogous project to analyze its International Standards on Auditing (ISAs). In 2007, clarity formulating practices were designed and are being used for all standards promulgated by the ASB after January of 2008.

        The Auditing Standards Board (ASB) has redesigned all auditing (AU) portions in the classification of records on auditing rules that demonstrate the ASB’s formulated clarity designing traditions constructed to cause the principles less harder to study, interpret, and put in use. 

        Furthermore, the Public Company Accounting Oversight Board (PCAOB) embraced a series of eight auditing rules related to the auditor’s evaluation of, and reaction to, risk in an internal control. The eight latest risk assessment rules direct the audit methods from the initial devising stages through the conclusive judgment of audit policies and results. As an aftereffect, the PCAOB auditing regulations and ISAs have more resemblance than forever.

Differences between ISA'S and US Auditing Standards

        The five fundamental discrepancies between ISA’s and US Auditing Standards are documentation of audit methods, going-concern assumptions, evaluating and reporting on internal checks over financial reporting; risk-assessment and feedback to assessed risks and the use of a secondary auditor for part of an audit.

        The first key difference discusses that the authentication of U.S. auditing rules and ISAs vary to some extent. AICPA and PCAOB auditing standards are more prescribed than ISAs, which are recognized as confiding more on the expert acumen of the auditor. For example, PCAOB Auditing Standards 3 necessitates that an engagement memo should be prepared. There is no such requirement under ISA. Retention periods of auditing work papers also differ. The ASB requires that audit work papers be retained for a period of at least 5 years, while the PCAOB mandates a retention period of at least 7 years. ISA 230, Audit Documentation, requires audit firms to establish policies and procedures for the retention period for audit engagements documentation. The reservation period for audit commitments are usually not shorter than five years from the stage of the auditor’s report, or if later, the time of the combined association or group auditor’s report.