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The PCAOB was created in response to an ever increasing number of accounting "restatements" (corrections of past financial statements) by public companies during the 1990s, and a series of high-profile accounting scandals and record-setting bankruptcies by large public companies, notably those in 2002 involving WorldCom and Enron, and the audit ...
The PCAOB adopted the ASB's auditing and attest standards as its temporary auditing rules in 2003. [10] The AICPA subsequently changed the designation of the leading GAAS-setting authority in February 2004. It designated the PCAOB as the authoritative body for GAAS related to public companies, while the ASB was designated for non-public ...
The PCAOB itself states in a disclaimer on all of its reports that its findings “are not an assessment of all of the firm’s audit work” and “[do] not constitute a representative sample of ...
In the United States, the standards are promulgated by the Auditing Standards Board, a division of the American Institute of Certified Public Accountants (AICPA). AU [ 1 ] Section 150 states that there are ten standards: [ 2 ] three general standards, three fieldwork standards, and four reporting standards.
Additionally, the PCAOB requires CPA firms auditing publicly traded companies to indicate how long the firm has been auditing the company, also known as tenure. Currently, there is no PCAOB requirement for companies to rotate their audit firm. However, the PCAOB has explored the possibility of making firm rotation a standard in 2011.
Both United States and International auditing standards include guidance related to financial statement assertions, although the specific assertions differ. The PCAOB and the IFAC address this topic in AS 1105 [ 6 ] (updated from AS 15 [ 7 ] as of December 31, 2016) and ISA 315, respectively. [ 4 ]
WebTrust is a family of e-commerce assurance and auditing programs co-developed by the AICPA with the Canadian Institute of Chartered Accountants (CICA). [32] Accounting associations in the UK, Australia, New Zealand and Hong Kong also participate in the program. [33] [34] A specialized variant of the program exists for certificate authorities.
The Codification of Statements on Auditing Standards is generally issued in January, and the U.S. Auditing Standards is issued as part of the AICPA Professional Standards in June of each year. The current U.S. Auditing Standards are available at the AICPA's Web site.