Guidance issued for firms adding new public company clients, professional staff. (news update).In a move to ensure even greater attention is paid to audit firm quality control systems, the SEC Practice Section 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." The guidance draws from AICPA AICPA See American Institute of Certified Public Accountants (AICPA). professional standards and covers the elements of a firm's quality control system that could be affected by the addition of new clients or personnel including: independence; personnel management, including audit partner rotation and concurring con·cur intr.v. con·curred, con·cur·ring, con·curs 1. To be of the same opinion; agree: concurred on the issue of preventing crime. See Synonyms at assent. 2. partner review; acceptance and continuance The adjournment or postponement of an action pending in a court to a later date of the same or another session of the court, granted by a court in response to a motion made by a party to a lawsuit. of clients and engagements; engagement performance, including completion of audits in progress, re-audits, quarterly reviews, issuance of comfort letters and discovery of possible mis-statements in financial statements reported on by a previous auditor; and 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 from www.aicpa.org/download/secps/020508__practaid.pdf. Send Us Your E-Mail Address See Internet address. e-mail address - electronic mail address , Receive "AICPA News Update" If you have not submitted your e-mail address to us or have changed it recently, send your e-mail address to memsat@aicpa.org. Indicate "e-mail address update" in the subject header (1) In a disk or tape file, a set of data that resides permanently at the beginning. It may be used for identification only (type of file, date of last update, etc.), or it may describe the structural layout of the contents, as is common with many document and database formats. field to help us process the submissions more efficiently. Include your full name, and, if known, your membership number on the e-mail message. Be assured the AICPA will not sell your e-mail address to outside third parties. Providing your e-mail address enables you to receive "AICPA News Update," a new electronic publication that focuses on Enron-related developments and other professional news. |
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