During the standard-setting process, the AICPA developed the first auditing standards and principles to both the public accounting community and non-public entities. The auditing standard was called the Committee on Auditing Procedure and was consigned to evaluate, discuss, and issue guidance on auditing-related matters. From 1939 to 2002, the AICPA’s Auditing Standards Board issued another two set of standards, which were Statement on Auditing Procedures and Statements on Auditing Standards (SASs) respectively. The responsibility to develop standards for audits of non-public entities is still signed to the Auditing Standards Board of the AICPA.
PCAOB created by Sarbanes-Oxley was delegated the responsibility to develop standards for the audits of the public entities, so the auditing standards for the public entities are sometimes referred to as PCAOB standards. PCAOB and the Securities Exchange Commission (SEC) now had final authority over auditing regulation and public-auditor professional-practices standards for audits of public companies. And it had divided the standards for audits of public into two parts: (a) A pronouncement issued by the AICPA before 2003 that has not been amended or superseded by PCAOB (b) A pronouncement issued by the PCAOB that got approval from SEC
AICPA and PCAOB get together to use their relevant pronouncements to make generally accepted auditing standards (GAAS) that specifically identify necessary qualifications and characteristics of auditors and provide guidance for auditors. From then on, auditors without following the guidance provided in GAAS are regarded as deficiencies.
SEC’s responsibility during the auditing standards-setting process is to provide justification for PCAOB to issue new standards.
For the audits of public entities
The PCAOB issues Auditing Standards that has been approved by the SEC to provide guidance for the audits of public entities....
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