A trio of professional groups have joined forces to launch a research project to explore user perceptions of financial statement audits and auditor reports.

The American Institute of CPAs, the American Accounting Association and the International Auditing and Assurance Standards Board issued a request for proposal this week, soliciting academic research to identify and provide information about such perceptions of financial statement users around the world.

The AICPA's Auditing Standards Board already has a project underway to consider whether the traditional auditor's report should be revised, and the IAASB recently completed a similar project in this regard.

"Anecdotal evidence points to financial statement users not consistently understanding communications in an unqualified auditor's report, but there's little rigorous evidence to support the anecdotal observations," said the chairman of the ASB's Audit Report Research Task Force, Douglas F. Prawitt, in a statement. "This project should ... anchor any effective modifications necessary to clarify the communication of information to financial statement users."

The president of the AAA Auditing Section, Mark Beasley, said that plan is for the ASB to select one or more proposals to examine perceptions in the United States and the IAASB to select one or more proposals to examine perceptions internationally. "We envision that, once the selected projects are completed, the ASB and IAASB will fund additional research to identify and explore ways in which the auditor's reports might be revised to communicate more clearly and to address identified user misperceptions," he said.

Research proposals must be submitted by Oct. 2, 2006.

The ASB and IAASB will provide between $10,000 and $20,000 for each project. Researchers will be required to submit a summary of results to the boards by Oct. 1, 2007, with a more detailed report to be provided by Jan. 7, 2008. The summary should be tailored toward practitioners, rather than readers of an academic journal.

The request for proposal is available at www.ifac.org/IAASB/downloads/AICPA-AAA-IAASB_RFP.doc.

Previously on WebCPA:

AICPA, AAA to Research Non-Financial Measures (June 16, 2006)

FASB, AICPA Issue Private Company Reporting Proposal (June 9, 2006)

IFAC Approves Study of Global Financial Reporting (Aug. 2, 2005)

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