Whether or not practitioners can assist their audit clients with financial statement presentation, or any nonattest services, and maintain their independence has been a long-running debate. To ensure that auditors remain independent, the AICPA Professional Ethics Executive Committee (PEEC) and the U.S. Government Accountability Office (GAO) have created complex and detailed rules.

AICPA's Hosting Services Interpretation concludes that when members provide hosting services, they are maintaining internal control over a client’s data or records, which presents a threat to independence. There are several practical issues you may face as a result of the interpretation.

As a part of its Enhancing Audit Quality Initiative, the AICPA has identified inconsistencies across the administering entities in the program that have impacted the quality of peer reviews. To address audit quality issues, the AICPA Peer Review Board issued several concept papers on how peer review will be administered in the future.

PICPA’s Accounting and Auditing Procedures Committee has been following the AICPA Auditing Standards Board’s (ASB) project on auditor’s reports to evaluate its impact on privately held companies. On Nov. 28, 2017, the ASB finally issued an exposure document.

The scope of the AICPA’s Enhancing Audit Quality initiative is considerable, and its accomplishments to date have been far-reaching, demonstrating AICPA's commitment to bettering the audit.

While most CPAs conceptually support high quality audits, many are not necessarily aware of the importance of supporting documentation or what that documentation should look like. The AICPA has identified several misconceptions regarding audit documentation.

On June 1, 2017, the Public Company Accounting Oversight Board finalized its six-year project to overhaul the auditor’s report. The new standard requires auditors to communicate critical audit matters in the audit report.

The AICPA Auditing Standards Board (ASB) recently issued an exposure draft that would significantly change the reporting model for employee benefit plans (EBP) subject to ERISA. The proposal is the result of a collaborative effort by the U.S. Department of Labor (DOL) and the ASB to address audit quality issues. The joint DOL/ASB working group concluded that some of the procedures unique to EBPs should be highlighted in the auditor’s report. The DOL was asked to provide a list of what they want included in the report. This blog highlights two of the more significant proposals.

The stress of attempting to bridge a client’s needs and expectations with the needs and expectations of regulatory bodies is frustrating enough; it is even more so when regulators are requesting things that you cannot ethically provide. Fortunately, the PICPA can help ensure that CPAs are asked to provide only those services that comply with professional standards, the AICPA and PICPA Codes of Professional Conduct, and state CPA statutes.

As potential clients in the now-legal medical marijuana industry in Pennsylvania begin to call on CPAs for professional services, a conflict arises as to whether or not CPAs can serve these clients under the profession’s Code of Professional Conduct.

Now is a good time to take stock of all of the personally identifiable information in your firm’s possession and focus on addressing the risks posed by a potential cybersecurity breach. To help ease the burden of dealing with these complex areas, the PICPA has developed a cybersecurity threat management program.

New technologies that enable the analysis of huge quantities of data are poised to radically transform auditing. While the use of data extraction software has increased and provided incremental improvement to the audit process, advances in workflow automation and artificial intelligence will soon result in a complete overhaul of the audit process.

The AICPA’s Professional Ethics Executive Committee (PEEC) recently released a reformatted Code of Professional Conduct. The new code is greatly improved and much easier to use. It is divided into sections based on practice areas, topically organized, and searchable.

The International Ethics Standards Board for Accountants (IESBA) has been grappling with this question. Its original exposure document, released in August 2012, would have required external reporting of suspected fraud or illegal acts. They received more than 70 comment letters, including one from the PICPA Professional Ethics Committee.

In a May 8, 2014, article on Complianceweek.com, author Tammy Whitehouse, Copy: Auditing in the Era of Big Data, highlights how firms are challenging traditional sampling methods in light of new technologies that leverage big data to evaluate 100 percent of a given audit population. The new technologies present a number of issues, including whether or not expectations that the auditor is responsible for detecting fraud will increase resulting in increased litigation risk. However, bigger questions remain for firms that do not embrace the new technologies.

The AICPA is working on an initiative to make sure that all firms associated with certain Form 5500 filings that are required to have a peer review have gone through with the peer review and that the scope of the review was correct. So, if your firm has been associated with filing certain Form 5500s, you need to consider whether your firm is in compliance.

Hot off the press! On Jan. 16, 2014, the FASB issued its first ever alternatives to U.S. GAAP for privately held companies. These changes originated through the Financial Accounting Foundation’s newly created Private Company Council (PCC). The PCC, which was established May 23, 2012, works under the FASB umbrella to propose financial reporting options for nonpublic entities. Proposed changes to U.S. GAAP go through the normal due process, with comments deliberated by the PCC. The FASB reconsiders the revised PCC proposal for potential endorsement. If final endorsement is received, the proposed revisions are issued as Accounting Standards Updates.

On Aug. 13, 2013, the PCAOB proposed radical changes that would require you to communicate audit issues that you, as an auditor, believe to be critical. Is this a roadmap for a lawsuit? Is the PCAOB essentially forcing auditors to engage legal counsel or hire a risk officer just to review audit opinions?

The AICPA, for its part, released a completely new special purpose framework designed for small businesses. Called the Financial Reporting Framework for Small- and Medium-Sized Entities, (FRF for SMEs), this new framework offers a simplified financial reporting option for those entities that are not required to use U.S. GAAP. Is this new framework right for your business or clients? The devil, as always, is in the details.

The relationships between a CPA and his or her clients can last for many years, having been built on a foundation of trust and professionalism. However, the increase in third parties asking for comfort letters threatens these relationships and challenges the integrity and ethical behavior of the CPA as well as their billable hours.