The Auditing Standards Board Clarity Project
The AICPA Auditing Standards Board (ASB) has begun the “Clarity Project.” The ASB is rewriting all their standards to make them easier to read, understand and implement. The ASB is drafting the proposed Statements of Auditing Standards consistent with their strategy to converge standards with those of the International Auditing and Assurance Standards Board (IAASB), who recently completed their own Clarity Project.
Recent Developments
ASB issues new exposure drafts, final preface to Codification under Clarity Project
The AICPA’s Auditing Standards Board (ASB) has released two new exposure drafts of proposed SASs under the “Clarity Project.” The exposure drafts propose changes to the content and organization of existing standards for audits of nonissuers.
Auditing Standards Board issues additional exposure drafts under Clarity Project
The AICPA Auditing Standards Board (ASB) has issued several proposed Statements on Auditing Standards (SAS) under the Clarity Project.
Background on Clarity Project
Learn more about the Clarity Project
Through the Clarity Project, the ASB is rewriting all of their standards, with the major changes being:
- Requirement paragraphs will be separated from the application text, so the auditor can identify the requirements more easily
- Each standard will contain an objective to help the auditor better understand what the standard is meant to accomplish
- All “clarified” standards will carry the same effective date, which will be set far enough in the future to allow firms sufficient time to update their methodologies and training programs
The most noticeable change to the standards will be to the way in which the requirements and application (or guidance) material are presented. Currently, requirements and guidance are commingled. Under the new format, requirement paragraphs will be separated from the application text. This presentation will allow auditors to identify the standard requirements more easily. This does not alter the auditors’ obligation to consider the entire text of the standard in carrying out their work on an engagement and in understanding and applying the professional requirements of the relevant standards.
Another significant change is the incorporation of an objective in each standard.
As it is redrafting the standards, the ASB will also consider whether to remove any unnecessary differences with the International Standards on Auditing. This is consistent with the ASB’s plan to harmonize its standards with those issued by the International Auditing and Assurance Standards Board, which is undergoing a similar clarity rewrite.
To address concerns of overload, the redrafted standards will all have the same effective date. That date will be set far enough in the future to allow adequate time for firms to update their methodologies and training programs.
The ASB estimates it will take two to three years to complete the clarity project. The ASB does not plan to issue any new auditing standards in the old format except to complete projects that are already near conclusion or as necessary to address urgent issues.
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