Auditing Special Assignment
Theresa Golding
BA 418 – Auditing
Dr. Charles Pineno
April 25, 2010
PART 1: “Small Firms May Face Audit Music” (published in The Wall Street Journal on April 19, 2007) addresses the ending of the delay in applying portions of the Sarbanes-Oxley Act of 2002 to smaller companies. At the time of the article, some 6,000 smaller public companies had yet to be required to “make an annual assessment of their internal financial-reporting controls with further review by the company’s outside auditor of these systems designed to help prevent accounting mistakes and fraud.” The delay arose from complaints that compliance was overly costly and time consuming for larger companies. According to Mr. Cox, the SEC and the Public Company Accounting Oversight Board (PCAOB) are close to making less burdensome for all companies which would end the need to further exempt the smaller companies. The proposed changes would make realization of compliance in 2008 possible. Delays could again result if the new standards are not issued soon enough to meet the current deadlines. The chairman of PCAOB, Mark Olson, has blamed the high cost of complying on what is viewed as an overly cautious approach. PCAOB reports that progress is being made but there is still a way to go as some auditing firms still have not fully integrated an audit of the company’s financial statements with an audit of the company’s internal controls which are interrelated.
PART 2 --RISK ASSESSMENT STANDARDS:
Standard 1 – Reasonable Assurance, Evidence SAS No. 104 (“Amendment to SAS No. 1, Codification of Auditing Standards and Procedures) addresses “the attributes of audit evidence and the concept of reasonable assurance.” This particular standard is closely related to General Standard 3: The auditor must exercise due professional care in the performance of the audit and the preparation of the report.
Chapter 1: The Role of the Public Accountant in the American Economy
The two forms of assurance services that
BA 418 – Auditing
Dr. Charles Pineno
April 25, 2010
PART 1: “Small Firms May Face Audit Music” (published in The Wall Street Journal on April 19, 2007) addresses the ending of the delay in applying portions of the Sarbanes-Oxley Act of 2002 to smaller companies. At the time of the article, some 6,000 smaller public companies had yet to be required to “make an annual assessment of their internal financial-reporting controls with further review by the company’s outside auditor of these systems designed to help prevent accounting mistakes and fraud.” The delay arose from complaints that compliance was overly costly and time consuming for larger companies. According to Mr. Cox, the SEC and the Public Company Accounting Oversight Board (PCAOB) are close to making less burdensome for all companies which would end the need to further exempt the smaller companies. The proposed changes would make realization of compliance in 2008 possible. Delays could again result if the new standards are not issued soon enough to meet the current deadlines. The chairman of PCAOB, Mark Olson, has blamed the high cost of complying on what is viewed as an overly cautious approach. PCAOB reports that progress is being made but there is still a way to go as some auditing firms still have not fully integrated an audit of the company’s financial statements with an audit of the company’s internal controls which are interrelated.
PART 2 --RISK ASSESSMENT STANDARDS:
Standard 1 – Reasonable Assurance, Evidence SAS No. 104 (“Amendment to SAS No. 1, Codification of Auditing Standards and Procedures) addresses “the attributes of audit evidence and the concept of reasonable assurance.” This particular standard is closely related to General Standard 3: The auditor must exercise due professional care in the performance of the audit and the preparation of the report.
Chapter 1: The Role of the Public Accountant in the American Economy
The two forms of assurance services that