Statements of Position

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On September 28, 1998, Securities and Exchange Commission (SEC) Chairman Arthur Levitt, Jr., expressed significant concern about the quality of financial reporting in corporate America. Chairman Levitt described the problem as one that must be addressed by the entire financial community rather than the government alone and called for several actions, including the formation of a blue ribbon panel to develop recommendations to improve audit committee performance. The panel was formed and named the Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees (BRC). In February 1999, the BRC issued Report and Recommendations of the Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees. The report includes ten recommendations for strengthening the independence of the audit committee and making it more effective. Two of the recommendations (numbers 8 and 10) suggest changes to generally accepted auditing standards (GAAS). As a result of the BRC's recommendations, and in conjunction with actions expected to be taken by the New York Stock Exchange, the National Association of Security Dealers, and the SEC, in a collaborative effort to improve audit committee effectiveness, the ASB believes that the proposed amendments to Statement on Auditing Standards (SAS) No. 61, Communication With Audit Committees (AICPA, Professional Standards, vol. 1, AU sec. 380), and SAS No. 71, Interim Financial Information (AICPA, Professional Standards, vol. 1, AU sec. 722), are responsive to the BRC's recommended changes to GAAS. The ASB supports increasing the dialogue on the matters noted in the amendments to SAS Nos. 61 and 71. However, the effectiveness of this proposal is dependent on the willingness of all parties to engage in the discussion and act on the implications. This document responds to only those recommendations that suggest changes to GAAS. The ASB encourages practitioners to read the BRC's report and recommendations in its entirety. Copies are available online at www.nyse.com and www.nasd.com.

ISBN

ed99-10-01t

Publication Date

1999

Relational Format

Book

Keywords

Communication in accounting -- Standards -- United States; Financial statements, Interim -- Standards -- United States

Disciplines

Accounting | Taxation

Comments

Originally published by: American Institute of Certified Public Accountants; Copyright and permission to reprint held by: American Institute of Certified Public Accountants; Exposure draft (American Institute of Certified Public Accountants), 1999, Oct. 1

Proposed statement on auditing standards : amendments to Statement on auditing standards no. 61, Communication with audit committees and Statement on auditing standards no. 71, Interim financial information;Amendments to Statement on auditing standards no. 61, Communication with audit committees and Statement on auditing standards no. 71, Interim financial information

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