Auditing Standards Board
Introduction to the Auditing Standards Board (ASB)
The ASB, short for Auditing Standards Board, exists to serve the public interest by improving the existing audit and attestation services in addition to encouraging new ones. The Auditing Standards Board produces statements, standards, and guidance to certified public accountants (CPAs) for non-public company audits. The pronouncements issued by the Auditing Standards Board in the form of statements, interpretations, and guidelines should be essentially adhered to by all CPAs while performing audits and attestations.
As stated by Investopedia, the Auditing Standards Board proffers performance, reporting, and quality control guidance as it pertains to audit and attest activities. The Auditing Standards Board consists of 19 members (representing different sectors and industries, including public accountants and educational, private, and governmental entities), counting:
- 5 members from local, regional, and national firms
- 5 members nominated by the National Association of State Boards of Accountancy (NASBA)
- 4 members from the Big Four firms
- 5 users and public members
Each of these members is nominated by the Director of the AICPA Audit and Attest Standards Staff and approved by the AICPA Board of Directors.
Besides, the Board has a Chairman who directs the Board meetings in addition to establishing procedures, sub-committees as well as performing other similar tasks in concurrence with the Director. In order to ensure the embodiment of most significant industries and sectors in the Auditing Standards Board, the AICPA has reserved nominations for various industry segments as part of its operating policies.
Creation of the Auditing Standards Board
In October 1978, after extensive studies carried out by the AICPA (American Institute of Certified Public Accountants) in conjunction with its sub-committees, the governing council established the Auditing Standards Board as the highest authoritative body in establishing GAAS, thus consolidating and replacing all preceding senior technical committees. It called for all AICPA members and public accountants to abide by the Auditing Standard Board’s pronouncements with respect to audit, attestation, and quality control. The Auditing Standards Board, therefore, began to delineate the responsibilities of the auditors in addition to providing guidance to allow them to accomplish work and emanate a report, among others.