Accounting-Auditing Homework

Accounting-Auditing Homework




ThePCAOB has the role of establishing auditing standards for publicorganizations in U.S., while the Auditing Standards Board (ASB) ofthe AICPA has the role of establishing auditing standards for privatecompanies in the U.S. Before PCAOB was created, the ASB had the roleof establishing auditing standards for public as well as privateorganizations (Rittenberg et al., 2012).


Theorganization that has the role of establishing auditing standardsinternationally is the International Standards of Auditing (ISA).


Whencreating a new SAS, ASB uses the International Standards of Auditingas the base standard and later adjusts the base standard only whenadjustments are necessary for the United States environment(Rittenberg et al., 2012). In case an auditor in the United Statesaudits historical financial statements according to ISAs, the auditormeets any ISA requirements, which extend above the requirements inthe AICPA standards.


TheAuditing Standard Board (ASB) of the AICPA is responsible for thecreation of auditing standards which are used by privateorganizations and other entities. In developing AICPA standards, theASB ensures that it harmonizes its outline with that of the IAASB.ASB uses the International Standards of Auditing as the base standardand later modifies the base standard to fit the United Statesenvironment. In the process, the ASB standards are made such thatthey fit the United States environment for private organizations andother entities. These AICPA auditing standards developed by the ASBbecome the generally accepted auditing standards in the UnitedStates.


ThePCAOB auditing standards may be impacted by international standardsto a greater extent. This is because international auditing standardshave to be adopted by any organization responsible for settingauditing standards in a given country. The PCAOB being responsiblefor establishing auditing standards in the U.S., it has to adapt theinternational standards.


Rittenberg,L. E., Johnstone, K. M., &amp Gramling, A. A. (2012). Auditing:A business risk approach.Melbourne, Vic.: South-Western Cengage Learning.