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Impact of the New Clarity Standards on Governmental Audits – Session Objective

Impact of the New Clarity Standards on Governmental Audits Presented by Beila Sherman, CPA and Enrique Llerena, CPA. Impact of the New Clarity Standards on Governmental Audits – Session Objective.

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Impact of the New Clarity Standards on Governmental Audits – Session Objective

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  1. Impact of the New Clarity Standards on Governmental AuditsPresented by Beila Sherman, CPA andEnrique Llerena, CPA

  2. Impact of the New Clarity Standards on Governmental Audits– Session Objective To provide an overview of the various changes in auditing standards issued by the AICPA and their impact on upcoming governmental audits Effective for years ending on or after December 15, 2012 (9/30/2013 Year Ends)

  3. The Clarified Standards • The codification of the clarified standards uses section numbering established by SAS No. 122, Statements on Auditing Standards: Clarification and Recodification, and contains “AU-C” section numbers. • “AU-C” is a temporary identifier to avoid confusion with references to AU sections. • “AU-C” remains effective through 2013.

  4. The Clarity Standards Format Introduction Statement of objective; Definitions, where relevant; Requirements; and Application and other explanatory material, with paragraphs using an “A” prefix. The explanatory material in the “A” prefix paragraph is cross-referenced to the corresponding paragraphs in the requirements section. Auditors are responsible for considering the entire text of each standard in applying its requirements.

  5. Summary of Changes and Its Impact AU-C 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance With Generally Accepted Auditing Standards

  6. Summary of Changes and Its Impact AU-C 210 Terms of Engagement

  7. Summary of Changes and Its Impact AU-C 220 Quality Control for an Engagement Conducted in Accordance With Generally Accepted Auditing Standards

  8. Summary of Changes and Its Impact AU-C 230 Audit Documentation

  9. Summary of Changes and Its Impact AU-C 240 Consideration of Fraud in a Financial Statement Audit

  10. Summary of Changes and Its Impact AU-C 250 Consideration of Laws and Regulations in an Audit of Financial Statements

  11. Summary of Changes and Its Impact AU-C 260 The Auditor’s Communication With Those Charged With Governance

  12. Summary of Changes and Its Impact AU-C 265 Communicating Internal Control Related Matters Identified in an Audit

  13. Summary of Changes and Its Impact AU-C 300 Planning an Audit

  14. Summary of Changes and Its Impact AU-C 315 Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement

  15. Summary of Changes and Its Impact AU-C 320 Materiality in Planning and Performing an Audit

  16. Summary of Changes and Its Impact AU-C 330 Performing Audit Procedures in Response to Assessed Risks and Evaluating the Audit Evidence Obtained

  17. Summary of Changes and Its Impact AU-C 402 Audit Considerations Relating to an Entity Using a Service Organization

  18. Summary of Changes and Its Impact AU-C 450 Evaluation of Misstatements Identified During the Audit

  19. Summary of Changes and Its Impact AU-C 500 Audit Evidence

  20. Summary of Changes and Its Impact AU-C 501 Audit Evidence – Specific Considerations for Selected Items

  21. Summary of Changes and Its Impact AU-C 505 External Confirmations

  22. Summary of Changes and Its Impact AU-C 510 Opening Balances – Initial Audit Engagements, Including Reaudit Engagements

  23. Summary of Changes and Its Impact AU-C 520 Analytical Procedures

  24. Summary of Changes and Its Impact AU-C 530 Audit Sampling

  25. Summary of Changes and Its Impact AU-C 540 Auditing Accounting Estimates, Including Fair Value Accounting Estimates and Related Disclosures

  26. Summary of Changes and Its Impact AU-C 550 Related Parties

  27. Summary of Changes AU-C 560 Subsequent Events and Subsequently Discovered Facts

  28. Summary of Changes and Its Impact AU-C 570 The Auditor’s Consideration of an Entity’s Ability to Continue as a Going Concern

  29. Summary of Changes and Its Impact AU-C 580 Written Representations

  30. Summary of Changes and Its Impact AU-C 585 Consideration of Omitted Procedures After the Report Release Date

  31. Summary of Changes and Its Impact AU-C 600 Special Considerations – Audits of Group Financial Statements (Including the Work of Component Auditors)

  32. Summary of Changes and Its Impact AU-C 610 The Auditor’s Consideration of the Internal Audit Function in an Audit of Financial Statements (In Process)

  33. Summary of Changes and Its Impact AU-C 620 Using the Work of an Auditor’s Specialist

  34. Summary of Changes and Its Impact AU-C 700 Forming an Opinion and Reporting on Financial Statements

  35. Forming an Opinion and Reporting on Financial Statements – AU-C 700 Headings and Subheadings

  36. Forming an Opinion and Reporting on Financial Statements – AU-C 700 Opinion

  37. Forming an Opinion and Reporting on Financial Statements – AU-C 700 Other Reporting Responsibilities (Yellow Book Report reference)

  38. Summary of Changes and Its Impact AU-C 705 Modification to the Opinion in the Independent Auditor’s Report

  39. Modifications to the Opinion – AU-C 705 Basis for qualified, adverse, or disclaimer (placed before opinion paragraph)

  40. Modifications to the Opinion – AU-C 705 Modified opinion (Qualified, Adverse, or Disclaimer

  41. Summary of Changes and Its Impact AU-C 706 Emphasis-of-Matter Paragraphs and Other-Matter Paragraphs in the Independent Auditor’s Report

  42. Summary of Changes and Its Impact AU-C 706 Emphasis-of-Matter Refers to a matter appropriately presented or disclosed in the financial statements that, in the auditors’ professional judgment, is of such importance that it is fundamental to users in understanding the financial statements. Examples are a going concern, litigation, change in policy like when GASB 54 implemented, significant related parties …

  43. Summary of Changes and Its Impact AU-C 706 Other-Matter Paragraphs Refers to a matter other than those presented or disclosed in the financial statements that, in the auditors’ professional judgment, is relevant to users’ understanding of the audit, auditors’ responsibilities, or the auditors’ report Examples are if prior periods presented, regulatory financials, in relation to opinion, RSI, other SI

  44. Emphasis of Matter and Other Matter Paragraphs – AU-C 706 • Emphasis of Matters • Matters appropriately presented or disclosed

  45. Emphasis of Matter and Other Matter Paragraphs – AU-C 706 • Other Matter • To understand audit matters (Combining statements, SI, RSI, SEFA)

  46. Summary of Changes and Its Impact AU-C 708 Consistency of Financial Statements

  47. Summary of Changes and Its Impact AU-C 720 Other Information in Documents Containing Audited Financial Statements

  48. Summary of Changes and Its Impact AU-C 725 Supplementary Information in Relation to the Financial Statements as a Whole

  49. Summary of Changes and Its Impact AU-C 730 Required Supplementary Information

  50. Summary of Changes and Its Impact AU-C 800 Special Considerations Audits of Financial Statements Prepared in Accordance with Special Purpose Framework

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