The American Institute of CPAs has posted new information on its Web site for auditors who are asking for further information from attorneys.
Exhibit C, “Statement on Updates to Audit Response Letters” in AU-C section 501, Audit Evidence Specific Considerations for Selected Items, of AICPA Professional Standards includes a statement that the Audit Responses Committee of the American Bar Association published in the Spring 2015 edition of The Business Lawyer.
The ABA noted that requests for updates to lawyers’ audit response letters have become more frequent in recent years, reflecting changes in accounting standards and auditing practices, along with more emphasis on loss contingencies by the Securities and Exchange Commission and the Financial Accounting Standards Board, in turn increasing auditors’ focus on loss contingencies.
The goal of the statement is to enhance the ability of lawyers to respond efficiently to update requests by auditors—thereby facilitating the audit process and contributing to audit quality. The statement provides a framework under which a lawyer may furnish an update letter to the auditor and is helpful in obtaining an update response from a lawyer when considered necessary by the auditor.
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