With a mission to reduce complexity, the AICPA Auditing Standards Board (ASB) is embarking on an ambitious project that will result in completely redrafted auditing standards.

“For the last several years, we have been hearing that the standards are too long, too complex,” says AICPA Vice President for Professional Standards Charles Landes. “As a result, the ASB is undertaking a rewriting project of all its standards. This clarity project is all about making the standards easier to read and easier to understand.”

The most noticeable change to the standards will be to the way in which the requirements and application (or guidance) material are presented. Currently, requirements and guidance are commingled. Under the new format, requirement paragraphs will be separated from the application text. Landes believes this presentation will allow auditors to identify the standard requirements more easily. He cautions, however, this does not alter the auditors’ obligation to consider the entire text of the standard in carrying out their work on an engagement and in understanding and applying the professional requirements of the relevant standards.

Another significant change is the incorporation of an objective in each standard.

“The objective helps to focus the auditor,” said Harold Monk, ASB chair. “It will help the auditor better understand what the standard is trying to accomplish.”

As it is redrafting the standards, the ASB will also consider whether to remove any unnecessary differences with the International Standards on Auditing. This is consistent with the ASB’s plan to harmonize its standards with those issued by the International Auditing and Assurance Standards Board, which is undergoing a similar clarity rewrite.

“The ASB is extremely sensitive to the audit profession’s weariness of standards overload,” says Monk. “It’s important to remember that we’re really just rewriting what is out there. We’re trying to make the standard easier to read and understand.”

To address concerns of overload, the redrafted standards will all have the same effective date. That date will be set far enough in the future to allow adequate time for firms to update their methodologies and training programs.

The ASB estimates it will take two to three years to complete the clarity project. The ASB does not plan to issue any new auditing standards in the old format except to complete projects that are already near conclusion or as necessary to address urgent issues.

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