![]() ![]() The Governmental Accounting Standards Board or GASB sets GAAP for state and local governmental entities. The audit report of a department store should include the same types of information as the audit report of another department store and the audit report of a city should include the same types of information as the audit report of another city.ĭifferent standards setting bodies establish GAAP for different types of entities. Reporting in accordance with GAAP ensures consistency and comparability among like entities. Generally accepted accounting principles or GAAP are the minimum standards and guidelines for financial accounting and reporting. Three of the acronyms that are confusing to CPAs – because they are related in form and in substance – are those for generally accepted accounting principles (GAAP) generally accepted auditing standards (GAAS), and generally accepted government auditing standards (GAGAS). The meaning of these acronyms is not always clear, even to the members of the profession that use them. Early application is permitted.Īhava Goldman, Senior Technical Manager- Audit & Attest Standards, American Institute of Certified Public Accountants.Certified public accountants, like other professionals, use a lot of acronyms. ![]() The amendments take effect for audits of financial statements for periods ending on or after June 15, 2016. When the auditor refers to the standards of the PCAOB in addition to GAAS in the auditor’s report, the auditor should use the form of report required by the standards of the PCAOB, amended to state that the audit was also conducted in accordance with GAAS. 122 Section 700, Forming an Opinion and Reporting on Financial Statements, clarifies the format of the auditor’s report that should be used when the audit is not under the PCAOB’s jurisdiction but the audit is conducted in accordance with the standards of the PCAOB (and, as required, GAAS). 131, Amendment to Statement on Auditing Standards No. Statement on Auditing Standards (SAS) No. Therefore, even though the regulator- for example, the CFTC- requires an audit to be conducted in accordance with PCAOB standards, that audit is required to also be conducted in accordance with GAAS. A regulator (other than the PCAOB) requiring that the audit be conducted in accordance with PCAOB standards does not make the audit fall within the jurisdiction of the PCAOB. The PCAOB determines which audits are within its jurisdiction, including audits of the financial statements of issuers and nonissuer brokers and dealers registered with the SEC. You may also conduct the audit in accordance with PCAOB standards, but you cannot conduct that audit only in accordance with PCAOB standards. Unless the audit is within the jurisdiction of the PCAOB, you are required to conduct the audit in accordance with Generally Accepted Auditing Standards. ![]() Or maybe, for whatever reason, the client just wants an audit conducted under PCAOB standards. Maybe the client has entered into a contractual agreement that requires an audit conducted under PCAOB standards. Perhaps the client is a clearing agency or futures commission merchant registered with the Commodity Futures Trading Commission, which requires that entities registered with it have an audit performed in accordance with PCAOB standards. The audit is not within the jurisdiction of the PCAOB. ![]() Securities and Exchange Commission), nor a broker or dealer registered with the SEC. Your client calls you up asking you to conduct the next audit of their financial statements in accordance with Public Company Accounting Oversight Board standards, however, the entity is not an issuer (as defined by the U.S. ![]()
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