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August 7, 2014

AICPA consults on audit quality enhancement

By Steffen Müller

The American Institute of Certified Public Accountants (AICPA) has issued a discussion paper that outlines plans and perspectives of the institute’s enhancing audit quality (EAQ) initiative.

With the released paper, Enhancing Audit Quality – Plans and Perspectives for the US CPA Profession, AICPA consults all stakeholders in the audit process of private entities on efforts and changes the institute is planning in order to help "auditors excel in a fast changing and complex business environment."

According to the paper, AICPA aims to enhance audit quality on the educational, practical and regulatory level of the audit profession. Amongst others, the institute proposes to:

– Align the CPA exam with real-world practice and increase auditors adherence of AICPA’s code of professional conduct,

– monitor the use of auditing and quality control standards and identify issues in order to specify improvements to the standards,

– enhance curricula, content and methods of instruction for major topical areas the profession serves and release a profession-widecompetency framework,

– monitor practice by performing extensive peer review procedures on high-risk and complex engagements and by requiring firms, in all cases where material non-conformity with applicable professional standards is noted, to engage a third party to perform issuance reviews with periodic reporting to a peer review Report Acceptance Body, and,

– consider sanctions, suspension or expulsion from AICPA membership, when a firm has failed to provide the AICPA Peer Review Program with a complete list of engagements that should be subject to review.

"Integrity and objectivity are core values for the CPA profession. Consistently performing high-quality audits is dependent upon adequate education and training, compliance with auditing and quality control standards, and experience working in specialized areas," said AICPA board of directors chairman Bill Balhoff.

"Through the EAQ, the AICPA will reinforce the quality of audit services for private entities and address any issues that may be identified."

The EAQ initiative has been launched in May 2014 and many AICPA committees, boards and staff contributed in order to "align the objectives of all audit-related AICPA efforts and collectively improve the quality of audit services delivered by the profession," according to AICPA president and chief executive officer Barry Melancon.

The issued EAQ discussion paper is open for comment until 7 November 2014. After this comment period, specific proposals and exposure drafts will be developed and released for public comment, AICPA said.

Related links

AICPA

Discussion paper: Enhancing Audit Quality – Plans and Perspectives for the U.S. CPA Profession

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