0
0
This Audit Guide provides the latest information on accounting and auditing issues affecting derivative instruments, hedging activities, and investments in securities. Updated with conforming changes as of May 1, 2008, it includes guidance in planning and performing audits under the risk assessment standards (SAS Nos. 104-111). This edition of the guide has also been conformed to reflect the Defining Professional Requirements standard (SAS No. 102). Furthermore, it provides additional guidance on the auditor’s responsibilities as set forth in SAS Nos. 112-114, including identifying and reporting internal control deficiencies, understanding the link between the auditor’s consideration of fraud and the auditor’s assessment of risk, dating of the management representation letter, and the auditor’s communications with those charged with governance.
The guide summarizes applicable requirements and practices, and delivers "how-to" advice for handling audit issues common to the derivatives industry. It includes accounting requirements for derivatives and a discussion of the relevant financial statement considerations for derivatives, hedging activities, and investments in securities. Included in the appendices is a list of FASB derivative implementation issues. The guide covers the following new accounting pronouncements:
For a topical listing of subject matter by chapter, click on the Table of Contents tab.
012528
012528
Purpose and Applicability
This Audit Guide is designed to provide practical guidance for implementing the Statement on Auditing Standards (SAS) on all types of audit engagements. The suggested auditing procedures contained in this guide do not increase or otherwise modify the auditor's responsibilities described in SAS No. 92, Auditing Derivative Instruments, Hedging Activities, and Investments in Securities (AICPA, Professional Standards, vol. 1, AU sec. 332). Rather, the suggested procedures in this guide are intended to clarify and illustrate the application of the requirements of SAS No. 92.
Public Accounting Firms Registered With the Public Companies Accounting Oversight Board
Subject to the Securities and Exchange Commission (SEC) oversight, section 103 of the Sarbanes-Oxley Act (act) authorizes the Public Company Accounting Oversight Board (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 as required by the act or the rules of the 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.
References to Professional Standards
In citing the professional standards, references are made to the AICPA Professional Standards publication. In those sections of the guide where specific PCAOB auditing standards are referred to, references are made to the AICPA's PCAOB Standards and Related Rules publication. Please refer to appendix B of this guide for a summary of major existing differences between AICPA standards and PCAOB standards. Additionally, when referencing professional standards, this guide cites section numbers and not the original statement number, as appropriate. For example, SAS No. 54 is referred to as AU section 317.
Applicability of Requirements of the Sarbanes-Oxley Act of 2002
Publicly held companies and other issuers (see definition following) are subject to the provisions of the act and related SEC regulations implementing the act. Their outside auditors are also subject to the provisions of the act and to the rules and standards issued by the PCAOB.
Presented in the following is a summary of certain key areas addressed by the act, the SEC, and the PCAOB that are particularly relevant to the preparation and issuance of an issuer's financial statements and the preparation and issuance of an audit report on those financial statements. However, the provisions of the act, the regulations of the SEC, and the rules and standards of the PCAOB are numerous and are not all addressed in this section or in this guide.
012528
Customer Service
Customer Service
Customer Service
Back to Browsing Products
