What was the purpose of the Clarity Project?

What was the purpose of the Clarity Project?

The Clarity Project is intended to revise and re-codify US generally accepted auditing standards (US GAAS) to make auditing standards easier to read, understand and implement in practice, while at the same time converging US GAAS with the International Auditing and Assurance Standards Board of the International …

What is a Clarity project?

What is the Clarity Project? A. To aid CPAs’ understanding of generally accepted auditing standards (GAAS) and to improve compliance with their requirements, the Auditing Standards Board (ASB) in 2004 launched a significant effort to make U.S. GAAS easier to read, understand, and apply.

When did the clarified Auditing Standards take effect?

The vast majority of the clarified standards were issued in 2011 and became effective for calendar year 2012 audits. The clarified standards have been codified as AU-C sections in AICPA Professional Standards.

WHO Issues Statements on Auditing Standards?

It is usually issued by the certified public accountant authoritative body in the region where the standards apply, such as the American Institute of Certified Public Accountants in the United States.

What are the three general standards of auditing?

GAAS come in three categories: general standards, standards of fieldwork, and standards of reporting. Keep in mind that the GAAS are the minimum standards you use for auditing private companies.

What is an au-c?

AU-C: The new audit (AU) standards will continue to be organized as they have been in the SAS with virtually all the standards being revised and recoded. Any section that has been updated in the clarity framework will be given a “C” to denote the application under the new clarity standards.

What is a sas114 letter?

This “SAS 114” letter is an American Institute of CPAs (AICPA) required communication letter for all financial statement audits. In performing an audit of your plan’s internal controls and plan financials, your auditors are required to obtain an understanding of the plan’s operations and internal controls.

What is the ASB plan for the Clarity Project?

The ASB’s plan for the Clarity Project is to completely revise and recodify all existing auditing (AU) sections of AICPA Professional Standards. In some cases, individual AU sections are being clarified “one for one” into individual clarified standards.

What is the purpose of the Clarity Project?

Objective. According to the AICPA, the foundation of the Clarity Project is the establishment of an objective for each auditing standard in order to better reflect a principles-based approach to standard setting.

Is the ASB issuing a new auditing standard?

The ASB will issue many of the clarified standards in the form of one new statement on auditing standards (SAS) that will be codified in “AU section” format—just as the existing standards are codified. SAS numbering, however, will not start over with SAS no. 1.

What are the changes in the clarified standards?

One of the most basic changes being made in the clarified standards is the status of the 10 basic rules traditionally known as the generally accepted auditing standards (GAAS) contained in current AU section 150. Auditors have traditionally classified these 10 standards into three groups: general, fieldwork and reporting.