Auditing class Various groups (the PCAOB, the SEC, the AICPA, the IAASB, COSO, F
ID: 2577312 • Letter: A
Question
Auditing class
Various groups (the PCAOB, the SEC, the AICPA, the IAASB, COSO, FASB, and IASB, not to mention state boards of accountancy and the courts) have vested interests in oversight and governance of the accounting profession. Consider each of these groups as you participate in the discussion.
Please respond to all of the following prompts in one combined main response:
Topic: Organizations Involved in Auditing
Describe the unique role each group plays with respect to the audit standard-setting process. Are all the groups really necessary? Are there redundancies in oversight or governance?
From an auditor’s perspective, which group is the most important? Why?
How do these groups contribute to the maintenance of professional quality?
Explanation / Answer
Roles plays by each group
1) PCAOB : Public Company Accounting Oversight Board is a board appointed by the SEC to oversee companies that are registered with the SEC, because they are publicly traded companies. This Public board can perform audits,and has the authority to set auditing standards.
2) SEC : Securities and exchange Commission is a group appointed by the government to oversee publicly traded companies, that they are following the accounting standards and guidelines, and they have the ability to bring charges against those that do not follow these guidelines and standards.
3) AICPA : American Institute of Certified Public Accountants is a professional organization for CPA's. They are an organization that helps develop standards for accounting for all businesses traded publicly, and those that are not traded publicly.
4) IAASB : International Auditing and Assurance Standards Board's objective is to serve the public interest by setting high-quality auditing and assurance standards and by facilitating the convergence of international and national auditing and assurance standards, thereby enhancing the quality and consistency of practice throughout the world and strengthening public confidence in the global auditing and assurance profession.
5) COSO : The Committee of sponsoring Organizations of the Treadway Commission is a joint initiative to combat corporate fraud. COSO has established a common internal control model against which companies and organizations may assess their contol systems.
6) FASB : Financial Accounting Standards Board was established to develop a set of financial accounting standards known as Generally Accepted Accounting Principles (GAAP) for the private sector.
7) IASB : International Accounting Standards Board is an independent, private sector body that develop and approves International Financial Reporting Standards (IFRSs). The IASB operates under the oversight of the IFRS Foundation. The IASB has complete responsibility of all technical matters of the IFRS foundation including the preparation and issuing of IFRSs.
All these groups are necessary for their relevant type of activities.
From an Auditor's perspective, the group IAASB is the most important because IAASB sets the high quality audit and assurance standards which helps the auditor for performing an effective audit.
All these groups regulate the accounting and auditing activities of companies and organizations by implementing necessary rules and regulations. In this way these groups contibute to the maintenance of professional quality.
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