Aicpa Statements On Auditing Standards

1351 WordsJun 24, 20166 Pages
AICPA Statements on Auditing Standards The government and accounting professionals have been focusing on accounting policy and procedures since the Enron, WorldCom, and Tyco financial scandals occurred. These financial scandals occurred by company executives and public accounting companies who failed to disclose and account for the known fraud (Casabona & Grego, 2003, p. 16). Due to these financial accounting scandals the Auditing Standards Board (ASB) of the AICPA established Statement on Auditing Standards (SAS), in addition to the requirements made by SOX and the PCAOB, to hold companies and auditors accountable for financial statement reporting (p. 16). According to Casabona and Grego (2003), in 1997, the ABS established SAS No. 82, Consideration of Fraud in a Financial Statement Audit (p. 16). SAS No. 82 provided companies with policies and procedures on the review of material fraud in a financial statement audit (p. 16). SAS No. 82 was in effect until 2000, when the ASB, AICPA’s Fraud Task Force, and the Panel on Audit Effectiveness selected by the PCAOB, determined changes and alterations to the SAS needed to be made based on research, recommendations from other accounting professional groups, and recommendations from financial reporting shareholders (p. 16). Therefore, SAS No. 99 was established in place of SAS No. 82, keeping the same title, Consideration of Fraud in a Financial Statement Audit (p. 16). SAS No. 99 as noted by Casabona and Grego heightens the

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