AICPA Tackles How to Improve Private Entity Audit Quality

The American Institute of CPAs (AICPA) is a global body of professionals comprising Chartered Public Accountants (CPAs). The institute issued a debate paper on 7 August 2014 trying to obtain opinion from Chartered Public Accountants, law makers, handlers of financial statements and other concerned parties on how the audit performance of private organizations can be improved.

The debate paper highlights the multidimensional effort, Enhancing Audit Quality that the American Institute of CPAs introduced in May. Barry Melancon, Chief Executive Officer and president of the institute stated that the purpose of the effort is to arrange the goals of all the labors of institute relating to audit and mutually expand the quality of audit work provided by professionals.

He further added that ‘Enhancing Audit Quality’ is a combined work regarding the audit of private organizations including private firms, non-profit entities, employees benefit plans and government organizations, specifically where there has been issues regarding quality in the past.

This effort on part of institution involves two-stage approach. The first step includes planned and suggested reforms that will instantly raise the standard the audit. Part of these suggestions have already been approved by regulators and are on their way for implementation while the other suggestions are currently under assessment.

The second stage of the efforts includes the use of technology as an observing mechanismalong with human monitoring. It will help in establishing quick communication between the professionals performing the audit, the American Institute of CPAs, and the organization’s accounting and auditing engagement.

The debate paper includes the short-term and long-term suggestions that tackle the problems regarding the effectiveness of audit of the financial statements of private organizations. The American Institute of CPAs is encouraging the concerned parties to give their feedback and their opinions on the ideas presented in debate paper. The opinions can be provided by 7 November 2014. The feedback can be provided on institute’s website.