Following news on variety of audit issues is courtesy of the AICPA’s Spring 2020 PR Prompts! newsletter. The format of the newsletter is set up to allow firms who provide peer reviews to put their logo and branding information at the top of the newsletter, print it, and send it to all their clients.
Since the AICPA is making it available for firms to use in their marketing, an extract follows.
For ease of reading, following text will not be put into quotation marks even though it is a verbatim quote from the AICPA.
Resources from the AICPA’s Enhancing Audit Quality(EAQ) Initiative
Through the EAQ, the AICPA shares resources and education to help you avoid the most common audit quality issues. Check out the latest resources:
COVID-19 Audit Implications
If you need information regarding auditing in the current environment visit the AICPA COVID Resource Center at aicpa.org/covidaudit or sign up for the AICPA COVID-19 Audit Implications webcast, where Bob Dohrer, AICPA chief auditor, and Mike Manspeaker, CPA, will answer questions submitted by hundreds of practitioners.
Auditing Revenue Recognition
Do you have clients with revenue subject to the requirements of FASB’s ASC 606, Revenue from Contracts with Customers? The AICPA’s revenue recognition toolkit has updated resources to help auditors stay independent when assisting attest clients with implementing FASB’s ASC 606. Take this quiz to see how well you know the independence requirements relative to assisting clients with ASC 606 implementation. Also, check out the article “How auditors can stay independent while advising on revenue recognition” to learn some best practices to avoid crossing the lines of independence.
Insights from Peer Review data show missteps in the following areas relative to auditing ASC 606 and other estimates:
- Risk assessment and substantive testing procedures
- Audit documentation
- Consideration of the effects of multiple non-attest services on auditor independence.
Explore the Private Company Practice Section’s (PCPS) Breaking Down Revenue Recognition toolkit periodically for new resources to help your firm and clients understand the standard and ways to avoid those missteps.
SOC Engagements
The AICPA’s new SOC for Supply Chain is a market-driven, flexible and voluntary reporting framework that includes Description Criteria and Trust Services Criteria. CPAs, management accountants and organization management can use this tool to communicate about the organization’s supply chain risk management efforts and assess the effectiveness of system controls that mitigate those risks.
Amid the novel coronavirus pandemic, the AICPA staff also prepared a nonauthoritative guidance to assist service auditors with performing and reporting on SOC 1 and SOC 2 examinations during these uncertain times.
EAQ 2019 Highlights and Progress Report:
See the 2019 Highlights and Progress Report to learn more about progress of the EAQ initiative.
And take a few minutes to listen to the EAQ episode of Ethically Speaking to hear more about the initiative, including the focus for 2020.