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AICPA Professional Standards

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AICPA Professional Standards offers a seamless source of professional standards applicable to non-public companies and contains pronouncements issued by the AICPA.
Pronouncements in this edition are arranged by subject with amendments noted, superseded portions deleted, and necessary conforming changes reflected. Many sections have been indexed for quick and easy data retrieval.

This edition includes standards and interpretations issued through June 1, 2007, including:

  • SAS No. 113, Omnibus Statement on Auditing Standards—2006
  • SAS No. 114, The Auditor’s Communication With Those Charged With Governance
  • SSAE No. 14, SSAE Hierarchy
  • SSVS No. 1, Valuation of a Business, Business Ownership Interest, Security, or Intangible Asset (and related interpretation)
  • Auditing Interpretation No. 1 of SAS No. 67, The Confirmation Process, titled “Use of Electronic Confirmations”
  • Accounting and Review Services Interpretation No. 28 of SSARS No. 1, titled “Special-Purpose Financial Statements to Comply With Contractual Agreements or Regulatory Provisions”
  • Accounting and Review Services Interpretation No. 29 of SSARS No. 1, titled “Reporting on an Uncertainty, Including an Uncertainty About an Entity’s Ability to Continue as a Going Concern”
  • Plus a host of other amendments and conforming changes

This 2-volume paperback set includes:

  • Statements on Auditing Standards and Related Interpretations
  • Statements on Standards for Attestation Engagements and Related Interpretations
  • Statements on Standards for Accounting and Review Services and Related
  • Interpretations
  • AICPA Code of Professional Conduct
  • AICPA Bylaws
  • Statements on Standards for Consulting Services
  • Statements on Quality Control Standards
  • Statements on Standards for Valuation Services
  • Standards for Performing and Reporting on Peer Reviews and Related Interpretations
  • Statements on Standards for Tax Services and Related Interpretations
  • Statements on Responsibilities in Personal Financial Planning Practice
  • Statements on Standards for Continuing Professional Education Programs and Related Policies and Forms

Table of Contents

  • TABLE OF CONTENTS
  • VOLUME 1
  • Section Page
  • How to Use This Volume 1
  • Applicability of AICPA Professional Standards and PCAOB Standards
  • Cross-References to SASs
  • U.S AUDITING—AICPA
    • AU 100 Statements on Auditing Standards—Introduction
      • 110—Responsibilities and Functions of the Independent Auditor
      • 120—Defining Professional Requirements in Statements on Auditing Standards
      • 150—Generally Accepted Auditing Standards
      • 161—The Relationship of Generally Accepted Auditing Standards to Quality Control Standards
    • AU 200 The General Standards
      • 201—Nature of the General Standards
      • 210—Training and Proficiency of the Independent Auditor
      • 220—Independence
      • 230—Due Professional Care in the Performance of Work
    • AU 300 The Standards of Field Work
      • 310—Appointment of the Independent Auditor
      • 311—Planning and Supervision
      • 311—Planning and Supervision: Auditing Interpretations of Section 311
      • 312—Audit Risk and Materiality in Conducting an Audit
      • 312—Audit Risk and Materiality in Conducting an Audit: Auditing Interpretations of Section 312
      • 313—Substantive Tests Prior to the Balance-Sheet Date
      • 315—Communications between Predecessor and Successor Auditors
      • 316—Consideration of Fraud in a Financial Statement Audit
      • 317—Illegal Acts by Clients
      • 317—Illegal Acts by Clients: Auditing Interpretations of Section 317
      • 319—Consideration of Internal Control in a Financial Statement Audit
      • 319—Consideration of Internal Control in a Financial Statement Audit: Auditing Interpretations of Section 319
      • 322—The Auditor’s Consideration of the Internal Audit Function in an Audit of Financial Statements
      • 324—Service Organizations
      • 324—Service Organizations: Auditing Interpretations of Section 324
      • 325—Communicating Internal Control Related Matters Identified in an Audit
      • 325A—Communication of Internal Control Related Matters Noted in an Audit
      • 325A—Communication of Internal Control Related Matters Noted in an Audit: Auditing Interpretations of Section 325A
      • 326—Evidential Matter
      • 326—Evidential Matter: Auditing Interpretations of Section 326
      • 328—Auditing Fair Value Measurements and Disclosures
      • 328—Auditing Fair Value Measurements and Disclosures: Auditing Interpretations of Section 328
      • 329—Analytical Procedures
      • 329—Analytical Procedures: Auditing Interpretations of Section 329
      • 330—The Confirmation Process
      • 331—Inventories
      • 331—Inventories: Auditing Interpretations of Section 331
      • 332—Auditing Derivative Instruments, Hedging Activities, and Investments in Securities
      • 9332—Auditing Derivative Instruments, Hedging Activities, and Investments in Securities: Auditing Interpretations of Section 332
      • 333—Management Representations
      • 333—Management Representations: Auditing Interpretations of Section 333
      • 334—Related Parties
      • 334—Related Parties: Auditing Interpretations of Section 334
      • 336—Using the Work of a Specialist
      • 336—Using the Work of a Specialist: Auditing Interpretations of Section 336
      • 337—Inquiry of a Client’s Lawyer Concerning Litigation, Claims and Assessments
      • 337—Inquiry of a Client’s Lawyer Concerning Litigation, Claims, and Assessments: Auditing Interpretations of Section 337
      • 339—Audit Documentation
      • 339—Audit Documentation: Auditing Interpretations of Section 339
      • 339A—Audit Documentation
      • 339A—Audit Documentation: Auditing Interpretations of Section 339A
      • 341—The Auditor’s Consideration of an Entity’s Ability to Continue as a Going Concern
      • 341—The Auditor’s Consideration of an Entity’s Ability to Continue as a Going Concern: Auditing Interpretations of Section 341
      • 342—Auditing Accounting Estimates
      • 342—Auditing Accounting Estimates: Auditing Interpretations of Section 342
      • 350—Audit Sampling
      • 350—Audit Sampling: Auditing Interpretations of Section 350
      • 380—Communication With Audit Committees
      • 380—Communication With Audit Committees: Auditing Interpretations of Section 380
      • 390—Consideration of Omitted Procedures After the Report Date
    • AU 400 The First, Second, and Third Standards of Reporting
      • 410—Adherence to Generally Accepted Accounting Principles
      • 410—Adherence to Generally Accepted Accounting Principles: Auditing Interpretations of Section 410
      • 411—The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles
      • 411—The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles: Auditing Interpretations of Section 411
      • 420—Consistency of Application of Generally Accepted Accounting Principles
      • 420—Consistency of Application of Generally Accepted Accounting Principles: Auditing Interpretations of Section 420
      • 431—Adequacy of Disclosure in Financial Statements
      • 435—Segment Information [Rescinded by the Auditing Standards Board; see section 9326.28–.41]
      • 435—Segment Information: Auditing Interpretations of Section 435
    • AU 500 The Fourth Standard of Reporting
      • 504—Association With Financial Statements
      • 504—Association With Financial Statements: Auditing Interpretations of Section 504
      • 508—Reports on Audited Financial Statements
      • 508—Reports on Audited Financial Statements: Auditing Interpretations of Section 508
      • 530—Dating of the Independent Auditor’s Report
      • 530A—Dating of the Independent Auditor’s Report
      • 532—Restricting the Use of an Auditor’s Report
      • 534—Reporting on Financial Statements Prepared for Use in Other Countries
      • 534—Reporting on Financial Statements Prepared for Use in Other Countries: Auditing Interpretations of Section 534
      • 543—Part of Audit Performed by Other Independent Auditors
      • 543—Part of Audit Performed by Other Independent Auditors: Auditing Interpretations of Section 543
      • 544—Lack of Conformity With Generally Accepted Accounting Principles
      • 544—Lack of Conformity With Generally Accepted Accounting Principles: Auditing Interpretations of Section 544
      • 550—Other Information in Documents Containing Audited Financial Statements
      • 550—Other Information in Documents Containing Audited Financial Statements: Auditing Interpretations of Section 550
      • 551—Reporting on Information Accompanying the Basic Financial Statements in Auditor-Submitted Documents
      • 552—Reporting on Condensed Financial Statements and Selected Financial Data
      • 558—Required Supplementary Information
      • 558—Required Supplementary Information: Auditing Interpretations of Section 558
      • 560—Subsequent Events
      • 560—Subsequent Events: Auditing Interpretations of Section 560
      • 561—Subsequent Discovery of Facts Existing at the Date of the Auditor’s Report
      • 561—Subsequent Discovery of Facts Existing of the Date of the Auditor’s Report: Auditing Interpretations of Section 56
    • AU 600 Other Types of Reports
      • 622—Engagements to Apply Agreed-Upon Procedures to Specified Elements, Accounts, or Items of a Financial Statement [Withdrawn by SAS 93; see AT section 201]
      • 622—Engagements to Apply Agreed-Upon Procedures to Specified Elements, Accounts, or Items of a Financial Statement: Auditing Interpretations of Section 622 [Withdrawn by SAS 93; see AT section 201]
      • 623—Special Reports
      • 623—Special Reports: Auditing Interpretations of Section 623
      • 625—Reports on the Application of Accounting Principles
      • 625—Reports on the Application of Accounting Principles: Auditing Interpretations of Section 625
      • 634—Letters for Underwriters and Certain Other Requesting Parties
      • 634—Letters for Underwriters and Certain Other Requesting Parties: Auditing Interpretations of Section 634
      • 642—Reporting on Internal Accounting Control: Auditing Interpretations of SAS No
    • AU 700 Special Topics
      • 711—Filings Under Federal Securities Statutes
      • 711—Filings Under Federal Securities Statutes: Auditing Interpretations of Section 711
      • 722—Interim Financial Information
    • AU 800 Compliance Auditing 1371
      • 801—Compliance Auditing Considerations in Audits of Governmental Entities and Recipients of Governmental Financial Assistance
    • AU 900 Special Reports of the Committee on Auditing Procedure
      • 901—Public Warehouses—Controls and Auditing Procedures for Goods Held
    • AU Risk Assessment Standards: SAS No–SAS No
      • SAS No, Amendment to Statement on Auditing Standards No, Codification of Auditing Standards and Procedures (”Due Professional Care in the Performance of Work”)
      • SAS No, Amendment to Statement on Auditing Standards No, Generally Accepted Auditing Standards
      • SAS No, Audit Evidence
      • SAS No, Audit Risk and Materiality in Conducting an Audit
      • SAS No, Planning and Supervision
      • SAS No, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement
      • SAS No, Performing Audit Procedures in Response to Assessed Risks and Evaluating the Audit Evidence Obtained
      • SAS No, Amendment to Statement on Auditing Standards No, Audit Sampling
    • AU Appendixes
    • AU Topical Index
  • ATTESTATION ENGAGEMENTS
    • AT Attestation Engagements—Contents
    • AT Statements on Standards for Attestation Engagements—Introduction
    • AT Statements on Standards for Attestation Engagements
    • 20—Defining Professional Requirements in Statements on Standards for Attestation Engagements
    • 101—Attest Engagements
    • 101—Attest Engagements: Attest Engagements Interpretations of Section 101
    • 201—Agreed-Upon Procedures Engagements
    • 301—Financial Forecasts and Projections
    • 401—Reporting on Pro Forma Financial Information
    • 501—Reporting on an Entity’s Internal Control Over Financial Reporting
    • 501—Reporting on an Entity’s Internal Control Over Financial Reporting: Attest Engagements Interpretations of Section 501
    • 601—Compliance Attestation
    • 701—Management’s Discussion and Analysis
    • AT Topical Index
  • TABLE OF CONTENTS
  • VOLUME 2
  • Section Page
  • How to Use This Volume 1
  • ACCOUNTING AND REVIEW SERVICES
    • AR Statements on Standards for Accounting and Review Services
    • 50—Standards for Accounting and Review Services
    • 100—Compilation and Review of Financial Statements
    • 100—Compilation and Review of Financial Statements: Accounting and Review Services Interpretations of Section 100
    • 110—Compilation of Specified Elements, Accounts, or Items of a Financial Statement
    • 120—Compilation of Pro Forma Financial Information
    • 200—Reporting on Comparative Financial Statements
    • 200—Reporting on Comparative Financial Statements: Accounting and Review Services Interpretations of Section 200
    • 300—Compilation Reports on Financial Statements Included in Certain Prescribed Forms
    • 300—Compilation Reports on Financial Statements Included in Certain Prescribed Forms: Accounting and Review Services Interpretations of Section 300
    • 400—Communications Between Predecessor and Successor Accountants
    • 400—Communications Between Predecessor and Successor Accountants: Accounting and Review Services Interpretations of Section 400
    • 500—Reporting on Compiled Financial Statements [Deleted by the issuance of Statement on Standards for Accounting and Review Services 7, November 1992.]
    • 600—Reporting on Personal Financial Statements Included in Written Personal Financial Plans
    • 600—Reporting on Personal Financial Statements Included in Written Personal Financial Plans: Accounting and Review Services Interpretations of Section 600
    • AR Appendixes
    • AR Topical Index
  • CODE OF PROFESSIONAL CONDUCT
    • ET Code of Professional Conduct—Introduction
    • ET 50 Principles of Professional Conduct
    • 51—Preamble
    • 52—Article I—Responsibilities
    • 53—Article II—The Public Interest
    • 54—Article III—Integrity
    • 55—Article IV—Objectivity and Independence
    • 56—Article V—Due Care
    • 57—Article VI—Scope and Nature of Services
    • ET 90 Rules: Applicability and Definitions
    • 91—Applicability
    • 92—Definitions
    • ET 100 Independence, Integrity, and Objectivity
    • 100.01—Conceptual Framework for AICPA Independence Standards
    • 101—Independence
    • Rule 101—Independence
    • Interpretations Under Rule 101—Independence
    • 102—Integrity and Objectivity
    • Rule 102—Integrity and Objectivity
    • Interpretations Under Rule 102—Integrity and Objectivity
    • 191—Ethics Rulings on Independence, Integrity, and Objectivity
    • ET 200 General Standards, Accounting Principles
    • 201—General Standards
    • Rule 201—General Standards
    • Interpretations Under Rule 201—General Standards
    • 202—Compliance With Standards
    • Rule 202—Compliance With Standards
    • Interpretation Under Rule 202— Compliance With Standards
    • 203—Accounting Principles
    • Rule 203—Accounting Principles
    • Interpretations Under Rule 203— Accounting Principles
    • 291—Ethics Rulings on General and Technical Standards
    • ET 300 Responsibilities to Clients 4651
    • 301—Confidential Client Information
    • Rule 301—Confidential Client Information
    • Interpretations Under Rule 301— Confidential Client Information
    • 302—Contingent Fees
    • Rule 302—Contingent Fees
    • Interpretation Under Rule 302—Contingent Fees
    • 391—Ethics Rulings on Responsibilities to Clients
    • ET 400 Responsibilities to Colleagues
    • ET 500 Other Responsibilities and Practices
    • 501—Acts Discreditable
    • Rule 501—Acts Discreditable
    • Interpretations Under Rule 501—Acts Discreditable
    • 502—Advertising and Other Forms of Solicitation
    • Rule 502—Advertising and Other Forms of Solicitation
    • Interpretations Under Rule 502—Advertising and Other Forms of Solicitation
    • 503—Commissions and Referral Fees
    • Rule 503—Commissions and Referral Fees
    • Interpretation Under Rule 503—Commissions and Referral Fees
    • 504—[Deleted]
    • 505—Form of Organization and Name
    • Rule 505—Form of Organization and Name Interpretations Under Rule 505—Form of Organization and Name
    • 591—Ethics Rulings on Other Responsibilities and Practices
    • ET Appendixes
    • ET Topical Index
  • BYLAWS
    • BL Definitions
    • BL 100 Name and Purpose 5303
    • 101—Name and Purpose
    • BL 200 Admission to, and Retention of, Membership and Association
    • 210—Members
    • 220—Requirements for Admission to Membership
    • 220R—Implementing Resolution Under Section 2.2
    • Requirements for Admission to Membership
    • 230—Requirements for Retention of Membership
    • 230R—Implementing Resolutions Under Section 2.3
    • Requirements for Retention of Membership
    • 240—Certificate of Membership
    • 250—Right of Members to Describe Themselves as Such
    • 260—International Associates
    • 260R—Implementing Resolution Under Section 2.6
    • International Associates
    • BL 300 Organization and Procedure
    • 310—General
    • 320—Membership
    • 320R—Implementing Resolution Under Section 3.2
    • Membership
    • 330—Council
    • 340—Board of Directors
    • 340R—Implementing Resolution Under Section 3.4
    • Board of Directors
    • 350—Officers Elected by Council
    • 350R—Implementing Resolution Under Section 3.5
    • Officers Elected by Council
    • 360—Committees
    • 360R—Implementing Resolutions Under Section 3.6
    • Committees
    • BL 400 Financial Management and Controls
    • 401—Financial Management and Controls
    • 401R—Implementing Resolution Under Article 4
    • Financial Management and Controls
    • 410—Audit
    • 420—Committee on Audit
    • 430—Execution of Instruments on Behalf of the Institute
    • 440—Indemnification
    • 450—Dues
    • 460—Fiscal Year
    • 460R—Implementing Resolution Under Section 4.6
    • Fiscal Year
    • BL 500 Meetings of the Institute and the Council
    • 501—Meetings of the Institute and the Council
    • 510—Meetings of the Institute
    • 520—Meetings of Council
    • 530—General Provisions Governing Meetings
    • BL 600 Election of Council, Board of Directors, and Officers of the Institute
    • 601—Election of Council, Board of Directors, and Officers of the Institute
    • 610—Members of Council Directly Elected by Members of the Institute
    • 610R—Implementing Resolution Under Section 6.1
    • Members of Council Directly Elected by Members of the Institute
    • 620—Selection of Members of Council to Represent State Societies
    • 630—Election of Members-at-Large of Council, Board of Directors, Chairman of the Board, and Vice Chairman of the Board
    • 640—Forfeiture of Office for Nonattendance
    • 650—Vacancies
    • 650R—Implementing Resolution Under Section 6.5
    • Vacancies
    • 660—Election Meeting of Council
    • BL 700 Termination of Membership and Disciplinary Sanctions
    • 701—Termination of Membership and Disciplinary Sanctions
    • 710—Resignation of Membership
    • 710R—Implementing Resolution Under Section 7.1
    • Resignation of Membership
    • 720—Termination of Membership for Nonpayment of
    • Financial Obligation or for Failure to Comply With Membership-Retention Requirements
    • 720R—Implementing Resolution Under Section 7.2
    • Termination of Membership for Nonpayment of Financial Obligation or for Failure to Comply With Membership-Retention Requirements
    • 730—Disciplinary Suspension and Termination of Membership Without a Hearing
    • 730R—Implementing Resolution Under Section 7.3
    • Disciplinary Suspension and Termination of Membership Without a Hearing
    • 740—Disciplining of Member by Trial Board
    • 740R—Implementing Resolution Under Section 7.4
    • Disciplining of Member by Trial Board
    • 750—Reinstatement
    • 750R—Implementing Resolution Under Section 7.5
    • Reinstatement
    • 760—Publication of Disciplinary Action
    • 760R—Implementing Resolution Under Section 7.6
    • Publication of Disciplinary Action
    • 770—Disciplinary Sections Not to Be Applied
    • Retroactively
    • BL 800 Amendments
    • 801—Amendments
    • 810—Proposals to Amend the Bylaws
    • 820—Proposals to Amend the Code of Professional Conduct
    • 830—Submission to Council via Board of Directors
    • 840—Submission to Membership by Mail Ballot
    • BL 900 General
    • 911—AICPA Mission Statement
    • 921—A Description of the Professional Practice of Certified Public Accountants
    • BL Topical Index
  • CONSULTING SERVICES
    • CS Statement on Standards for Consulting Services,001
    • 100—Consulting Services: Definition and Standards
    • CS Topical Index
  • QUALITY CONTROL
    • QC Quality Control
    • 20—System of Quality Control for a CPA Firm’s Accounting and Auditing Practice
    • 30—Monitoring a CPA Firm’s Accounting and Auditing Practice
    • 40—The Personnel Management Element of a Firm’s System of Quality Control—Competencies Required by a Practitioner-in-Charge of an Attest Engagement
  • PEER REVIEW
    • PR Peer Review—Contents
    • PR Standards for Performing and Reporting on Peer Reviews ,661
    • 100—Standards for Performing and Reporting on Peer Reviews
    • PR 9000 Peer Review Interpretations
    • 9100—Standards for Performing and Reporting on Peer Reviews: Peer Review Interpretations of Section 100
  • TAX SERVICES
    • TS Tax Services
    • 100—Tax Return Positions
    • 9100—Tax Return Positions: Tax Services Interpretations of Section 100
    • 200—Answers to Questions on Returns
    • 300—Certain Procedural Aspects of Preparing Returns
    • 400—Use of Estimates
    • 500—Departure From a Position Previously Concluded in an Administrative Proceeding or Court Decision
    • 600—Knowledge of Error: Return Preparation
    • 700—Knowledge of Error: Administrative Proceedings
    • 800—Form and Content of Advice to Clients
    • 900—Appendix: Cross-Reference of Previous and Revised Statements
    • TS Topical Index
  • PERSONAL FINANCIAL PLANNING
    • PFP Personal Financial Planning
    • 100—Basic Personal Financial Planning Engagement Functions and Responsibilities
    • 200—Working With Other Advisers
    • 300—Implementation Engagement Functions and Responsibilities
    • 400—Monitoring and Updating Engagements—Functions and Responsibilities
    • 500—Developing a Basis for Recommendations
    • PFP Topical Index
  • CONTINUING PROFESSIONAL EDUCATION
    • CPE Continuing Professional Education
    • 10—Policies for the CPE Membership Requirement
    • CPE—Form for CPE Information
    • 100—Preamble
    • 200—Standards for CPAs
    • 300—Standards for CPE Program Sponsors
    • 400—Glossary
    • CPE Topical Index

Excerpts

Applicability of AICPA Professional Standards and Public Company Accounting Oversight Board Standards

Background

As a result of the passage of the Sarbanes-Oxley Act of 2002 (Act), auditing and related professional practice standards to be used in the performance of and reporting on audits of the financial statements of public companies are established by the Public Company Accounting Oversight Board (PCAOB).

The term public companies, as used above, actually encompasses more entities than just public companies. To state the authority of the PCAOB more precisely-the Act authorizes the PCAOB to establish auditing and related attestation, quality control, ethics, and independence standards to be used by registered public accounting firms in the preparation and issuance of audit reports for entities subject to the Act or the rules of the Securities and Exchange Commission (SEC).

Accordingly, public accounting firms registered with the PCAOB are required to adhere to all PCAOB standards in the audits of issuers, as defined by the Act, and other entities when prescribed by the rules of the SEC (hereinafter collectively referred to as issuers).

For audits of entities not subject to the Act or the rules of the SEC (hereinafter referred to as nonissuers), the preparation and issuance of audit reports must be conducted in accordance with the AICPA Code of Professional Conduct and the standards promulgated by the AICPA Auditing Standards Board (ASB).  Audits of nonissuers remain governed by generally accepted auditing standards (GAAS) and Statements on Quality Control Standards as issued by the ASB.

Who Is an Issuer?

The term issuer means an issuer (as defined in section 3 of the Securities Exchange Act of 1934 (15 U.S.C. 78c)), the securities of which are registered under section 12 of that Act (15 U.S.C. 781), or that is required to file reports under section 15(d) (15 U.S.C. 78o(d)), or that files or has filed a registration statement that has not yet become effective under the Securities Act of 1933 (15 U.S.C. 77a et seq.), and that it has not withdrawn.

Standards Applicable to the Audits of Nonissuers

With the formation of the PCAOB, the ASB was reconstituted and its jurisdiction amended to recognize the ASB as a body with the authority to promulgate auditing, attestation and quality control standards relating to the preparation and issuance of audit reports for nonissuers.

Failure to follow ASB standards in the audit of a nonissuer would be considered a violation of Rule 201, General Standards [ET section 201.01], and/or Rule 202, Compliance With Standards [ET section 202.01], of the AICPA's Code of Professional Conduct (AICPA Code).

As a caution to readers, pursuant to SAS No. 95, Generally Accepted Auditing Standards [AU section 150] , interpretative publications are recommendations on the application of SASs in specific circumstances, including engagements for entities in specialized industries. Interpretative Publications, which include auditing interpretations, auditing guidance in Audit and Accounting Guides (Guides), and auditing guidance found in Statements of Position (SOPs), are issued under the authority of the ASB. The auditor should identify interpretative Publications applicable to his or her audit. If the auditor does not apply the auditing guidance included in an applicable Interpretative Publication, the auditor should be prepared to explain how he or she complied with the SAS provisions addressed by such auditing guidance.

The ASB will continue to issue SASs and Interpretative Publications that relate to audits of nonissuers and auditors should be alert to those issuances.

Standards Applicable to the Audits of Issuers

Rule 3100 issued by the PCAOB (see PCAOB Release No. 2003-009) generally requires all registered public accounting firms to adhere to the PCAOB's standards in connection with the preparation or issuance of any audit report on the financial statements of an issuer. Rule 3100 requires registered public accounting firms and their associated persons to comply with all applicable standards.  Accordingly, if the PCAOB's standards do not apply to an engagement or other activity of the firm, Rule 3100, by its own terms, does not apply to that engagement or activity.

Compliance With Standards Applicable to the Audits of Issuers

Any registered public accounting firm or person associated with such a firm that fails to adhere to applicable PCAOB Standards in connection with an audit of the financial statements of an issuer may be the subject of a PCAOB disciplinary proceeding in accordance with Section 105 of the Act. In addition, the Act provides that any violation of the PCAOB's Rules is to be treated for all purposes in the same manner as a violation of the Securities Exchange Act of 1934, 15 U.S.C. 78a et seq., or the rules and regulations issued thereunder, and any person violating the PCAOB's Rules ''shall be subject to the same penalties, and to the same extent, as for a violation of [the Exchange] Act or such rules or regulations.''

Rules 201 [ET section 201.01] and 202 [ET section 202.01] of the AICPA's Code of Professional Conduct require a member who performs auditing and other professional services to comply with standards promulgated by bodies designated by AICPA Council. AICPA Council has designated the PCAOB as a body with the authority to promulgate auditing and related attestation standards, quality control, ethics, independence and other standards relating to the preparation and issuance of audit reports for issuers.

The AICPA's Professional Ethics Division is able to hold an AICPA member who performs audits of the financial statements of issuers accountable under Rules 201 [ET section 201.01] and 202 [ET section 202.01] of the AICPA's Code of Professional Conduct for compliance with PCAOB'S auditing and related professional practice standards when performing such audits.

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