The PCAOB adopted Auditing Standard No. 6, Evaluating Consistency of Financial Statements, and an accompanying set of amendments to the Board's interim auditing standards.
“Auditing Standard No. 6 will improve the quality of the auditor’s reporting on items that affect the consistency of financial statements, such as a company’s adoption of new accounting principle or its correction of a material misstatement,” said Mark Olson, PCAOB chairman.
The new standard and related amendments update the auditor's responsibilities to evaluate and report on the consistency of a company's financial statements and align the auditor's responsibilities with SFAS No. 154.
It also improves the auditor reporting requirements by clarifying that the auditor's report should indicate whether an adjustment to previously issued financial statements results from a change in accounting principle or the correction of a misstatement.
The Board also removed the hierarchy of generally accepted accounting principles (GAAP) from its interim auditing standards. Because the FASB intends to incorporate the hierarchy in the accounting standards, it no longer will be needed in the auditing standards.
Press release
© PCAOB
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