AICPA Proposes Standards on Communicating With Governing Bodies

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April 6, 2006

The American Institute of Certified Public Accountants' Auditing Standards Board issued a proposed Statement on Auditing Standards in March, “The Auditor's Communication With Those Charged With Governance,” for issuance as an Exposure Draft. This proposed statement establishes standards and provides guidance to an auditor on matters to be communicated with those charged with governance. The proposed statement would replace SAS No. 61, “Communication With Audit Committees,” as amended.

In the wake of well-publicized corporate audit and accountability failures, recent AICPA activity is highly correlated to Sarbanes-Oxley Act topics such as internal controls, accountability, governance, risk assessment, and international standard-setting convergence. The proposed statement increases the scope of the current SAS 61 and would:
• be applicable to audits of the financial statements of all non-issuers,
• establish a requirement for the auditor to communicate to those charged with governance certain significant matters related to the audit,
• increase the nature of items identified for communication to governing bodies,
• identify the additional items, and
• provide guidance on the communication process.

The Exposure Draft is available at www.aicpa.org/members/div/auditstd/technic.htm. The comment period for the draft ends on May 31. NACUBO urges members to review AICPA activities, read Exposure Drafts, and respond directly or through NACUBO with feedback during designated comment periods.

NACUBO contact: Sue Menditto, director, accounting policy.