AICPA Moves to Assure Audit Quality; New Guidance in Light of Increased Auditor Changes.Business Editors NEW YORK--(BUSINESS WIRE)--May 8, 2002 In a move to ensure even greater attention is paid to audit firm quality control systems, the SEC Practice Section of the American Institute of Certified Public Accountants With over 330,525 CPA members (in August 2006), the American Institute of Certified Public Accountants (AICPA) is the largest professional organization of Certified Public Accountants (CPAs) in the United States of America. (AICPA AICPA See American Institute of Certified Public Accountants (AICPA). ) issued guidance for U.S. audit firms. The special guidance is directed toward audit firms taking on increased numbers of new publicly traded clients and/or professional staff. The guidance comes at time when, following the collapse of Enron Enron A U.S. energy-trading and utilities company that housed one of the biggest accounting frauds in history. Enron's executives employed accounting practices that falsely inflated the company's revenues, which, at the height of the scandal, made the firm become the seventh , large numbers of public companies may be seeking new audit firms. "In the wake of Enron, many SEC registrants have changed auditors AUDITORS, practice. Persons lawfully appointed to examine and digest accounts referred to them, take down the evidence in writing, which may be lawfully offered in relation to such accounts, and prepare materials on which a decree or judgment may be made; and to report the whole, together ," said Robert J. Kueppers, Chair of the SEC Practice Section. "The resulting influx of new clients and personnel in a short period of time may require a given firm to pay special attention to its quality control systems. We encourage firms to use this guidance to review their systems." The guidance is designed to ensure that SEC Practice Section member firms continue to provide quality audits in 2002, a period of considerable change. The guidance draws from existing professional standards established by the AICPA and covers the elements of a firm's quality control system that conceivably con·ceive v. con·ceived, con·ceiv·ing, con·ceives v.tr. 1. To become pregnant with (offspring). 2. could be affected by the addition of new clients or personnel including: - Independence - Personnel management, including audit partner rotation and concurring partner review - Acceptance and continuance of clients and engagements - Engagement performance, including the completion of audits in progress, re-audits, quarterly reviews, issuance of comfort letters and discovery of possible misstatements in financial statements reported on by a previous auditor - Quality-control monitoring The practice aid, Assessing the Effect on a Firm's System of Quality Control Due to a Significant Increase in New Clients and/or Experienced Personnel, is available on the AICPA's website at (http://www.aicpa.org). About the SEC Practice Section The SEC Practice Section is a self-regulatory group whose objective is to improve the practice of CPA (Computer Press Association, Landing, NJ) An earlier membership organization founded in 1983 that promoted excellence in computer journalism. Its annual awards honored outstanding examples in print, broadcast and electronic media. The CPA disbanded in 2000. firms. The AICPA bylaws The rules and regulations enacted by an association or a corporation to provide a framework for its operation and management. Bylaws may specify the qualifications, rights, and liabilities of membership, and the powers, duties, and grounds for the dissolution of an require that all members that engage in the practice of public accounting with a firm auditing one or more SEC clients as defined by AICPA Council are required to join the Section. The Section currently has approximately 1,200 member firms, which either audit registrants that file financial statements with the U.S. Securities and Exchange Commission or have joined the Section voluntarily. About the AICPA The American Institute of Certified Public Accountants is the national, professional organization of CPAs, with more than 330,000 members in business and industry, public practice, government, and education. It sets U.S. auditing and professional ethical standards and, with the Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). , U.S. accounting standards. The AICPA is the first national, professional association to be ISO (1) See ISO speed. (2) (International Organization for Standardization, Geneva, Switzerland, www.iso.ch) An organization that sets international standards, founded in 1946. The U.S. member body is ANSI. 9001-certified, in recognition of its quality management and assurance practices. |
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