NEW AUDITING RULES AND PROCEDURES TAKE EFFECT

The Board of Accountancy (“BoA”) and the accountancy profession recently implemented a number of major auditing standards and procedures pursuant to BoA Resolution 125-2016.

Among others, these include PSA 700 (Revised), Forming an Opinion and Reporting on Financial Statements : PSA 701 (Revised), Communicating Key Audit Matters in the Independent Auditor’s Report; PSA 705 (Revised), Modifications to the Opinion in the Independent Auditor’s Report; PSA 706 (Revised), Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor’s Report; PSA 720 (Revised), The Auditor’s Responsibilities Relating to Other Information and, PSA 570 (Revised) Going Concern.

These are intended to increase the transparency and enhance the information value of the auditors report

The new standards took effect for audits of financial statements for periods ending on or after December 15, 2016. The changes prescribed in the new rules are the most in recent years in terms of number and impact on the format and content of the auditors report. The more than 6,500 CPAs and auditing partnership firms are all expected to comply with these new rules as they provide their audit services.

“We would like that the stakeholders that will be affected by these standards and procedures are aware of these and should be able to implement and adopt these properly. Towards this end, the BoA has decided to form a Task Force on the Expanded Auditors Report (Task Force EAR). This Task Force EAR shall be mandated to help in the dissemination of information and implementation of the new standards and procedures, said BoA Chairman Joel Tan-Torres.

The Task Force EAR will focus on:

  1. Establish a virtual “Help Desk” that will accept and respond queries
    2. Create and maintain a website that will provide information and links to established resources
    3. Conduct briefings to stakeholders
    4. Produce materials (flyers, video, etc.) for dissemination
    5. Address implementation and interpretation issues and prescribe resolutions to the BoA for their final action
    6. Monitor the awareness and implementation by online surveys; getting feedback from stakeholder groups during their events and the CPD events ; etc.
    7. Submit a final report to BoA by May 30, 2017

Representatives from the auditing firms and sectoral organization would comprise the Task Force EAR. Invitations will be sent to the big accounting firms, identified sectoral organizations and selected SMPs to nominate their representatives to the Task Force. The Chairman of BoA will head the Task Force.

You can provide inputs to the BoA who can be considered the representative/s from the SMP. Submit the name/s, contact information and short description of your recommendee/s to boa.secretariat@gmail.com.