AICPA proposes to revise attestation standards

The American Institute of CPAs’ Auditing Standards Board is proposing revisions in the standards for attestation engagements.

The AICPA ASB exposed for public comment Wednesday a proposed Statement on Standards for Attestation Engagements, Revisions to Statement on Standards for Attestation Engagements No. 18: Clarification and Recodification. It would supersede AT-C section 105, Concepts Common to All Attestation Engagements; AT-C section 205, Examination Engagements; AT-C section 210, Review Engagements; and AT-C section 215, Agreed-Upon Procedures Engagements, in AICPA Professional Standards.

The proposed SSAE would no longer require practitioners to ask for a written assertion from the responsible party when the practitioner is reporting directly on the subject matter or performing an agreed-upon procedures engagement.

The proposals would also more closely harmonize AT-C section 210 with the limited assurance provisions of International Standard on Assurance Engagements 3000 (Revised), Assurance Engagements Other than Audits and Reviews of Historical Financial Information, including changing the term review engagement to limited assurance engagement. The proposed revisions to AT-C section 210 more specifically describe the types of procedures that can be done in a limited assurance engagement. These procedures are similar to the procedures a practitioner can perform in an examination engagement, except the nature, timing, and extent of those procedures are customized to a limited assurance engagement. The proposed changes to AT-C section 210 would require a practitioner’s report ti include an informative summary of the work done as a basis for the practitioner’s conclusion.

In addition, the proposed SSAE would change the agreed-upon procedures section by no longer requiring that all the parties to the engagement (including the engaging party, the responsible party when applicable, and users of the practitioner’s report) agree to the procedures to be performed and, thus, take responsibility for their sufficiency. Instead, the proposed change would require the engaging party to acknowledge, before issuing the report, the appropriateness of the procedures for the intended purpose of the engagement, and would explicitly allow the practitioner to develop, or assist in developing, the procedures. The proposed revision would also permit a practitioner to release a general-use report, unless the procedures are prescribed and the practitioner is prevented from designing or performing extra procedures, or the criteria aren’t available to users or are suitable only for a limited number of users.

The AICPA is asking for feedback on the proposal by Oct. 11, 2018.

Separately, the AICPA also recently made recommendations to the Treasury Department and the Internal Revenue Service about the initial guidance on the deduction of business interest expense by certain large businesses, under the Tax Cuts and Jobs Act.

In Notice 2018-28, Initial Guidance Under Section 163(j) as Applicable to Taxable Years Beginning After December 31, 2017, the Treasury Department and the IRS described the rules they plan to issue and asked for comments about the additional guidance that taxpayers will need to compute the business interest expense limitation under section 163(j) of the tax code. The AICPA made more than 20 recommendations in its comment letter.