AICPA’s Auditing Standards Board Asserts Commitment to Set Auditing Standards for Nonpublic Entities

The addition moves to ensure greater participation in the standards setting process. The ASB will continue to set auditing standards for nonpublic entities.

The Public Company Accounting Oversight Board established by the Sarbanes-Oxley Act of 2002 sets auditing standards for public companies.

The Council action recognizes that users of private entities’ financial statements have very different needs from the users of public companies’ financial statements. Going forward, the ASB will focus its activities on nonpublic entities or “non-issuers,” those entities that do not fall under the definition of “issuer” in the Sarbanes-Oxley Act.

The reconstituted ASB mission is to—

• Develop auditing, attestation, and quality control standards for nonpublic engagements that meet the needs of users and inspire public trust in the profession;

• Contribute to the development of high quality national and international auditing and assurance standards, and

• Respond in a timely fashion to the needs of the profession for clear and practical guidance in implementing the standards.

Under the plan approved by the AICPA Board of Directors, the reconstituted ASB will consist of 19 members representing small and large CPA firms as well as representatives of the state boards of accountancy, federal regulators, the user community and public.