The American Institute of CPAs outlined plans to simplify the plethora of auditing standards and eliminate any that had no clear objective.
Harold J. Monk Jr., chairman of the AICPA’s Auditing Standards Board, described the Clarity Project, which is expected to take between two and three years to complete. The approach is to have a standard format for all auditing standards.
“It will start with an introduction to explain the purpose of the standard, followed by an overall objective for what the auditor is supposed to accomplish,” said Monk. “The standard will be a candidate for elimination if we can’t find an objective.”
The project has already found instances of duplication in auditing standards, and aims to get rid of any redundancies. Board members will build a glossary of terms for all of the auditing standards, and then will set requirements for “shoulds” and “musts” that auditors have to comply with as they go through the audit process. That will be followed by application materials with cross-references to the various requirements. There will be special sections for items that are unique to small firms and governmental entities.
U.S. auditing standards are simultaneously in the process of converging with the international standards on auditing, so the Clarity Project will work on removing unnecessary differences between the two sets of standards. “By the time we complete this project, our standards and the international standards will be essentially the same,” said Monk.
While the project is in progress, the goal of the board is to not issue too many new standards except those needed to address emerging issues. The clarified standards are likely to take effect in 2011.
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