3 pages

English

4571-comment-letter-on-isae-34

Irgu - Regina Miles

Le téléchargement nécessite un accès à la bibliothèque YouScribe
Tout savoir sur nos offres

3 pages

English

Le téléchargement nécessite un accès à la bibliothèque YouScribe
Tout savoir sur nos offres

A propos
Informations
Extrait

Description

September 8, 2010 Mr. James Gunn Technical Director International Audit and Assurance Standards Board 545 Fifth Avenue, 14th Floor New York, NY 10017 Re: Exposure Draft: Proposed International Standard on Assurance Engagements 3420, “Assurance Reports on the Process to Compile Pro Forma Financial Information Included in a Prospectus” Dear Mr. Gunn: The American Institute of Certified Public Accountants (AICPA) is pleased to comment on the International Auditing and Assurance Standards Board’s (IAASB) proposed International Standard on Assurance Engagements (ISAE) 3420, “Assurance Reports on the Process to Compile Pro Forma Financial Information Included in a Prospectus,” which deals with reasonable assurance engagements undertaken by a professional accountant in public practice to report on the process to compile pro forma financial information (PFI) included in a prospectus, where such reporting is required by securities law or the regulation of the securities exchange in the jurisdiction in which the prospectus is to be issued, or where this reporting is generally accepted practice in such jurisdiction. This letter provides our responses to the request for specific comments. 1. The AICPA’s Auditing Standards Board (ASB) does not intend to adopt or converge with this exposure draft (ED). Our current standard on reporting on PFI—Chapter 4, “Reporting on Pro Forma Financial Information,” of Statement on Standards for ...

Informations

Publié par	Irgu
Nombre de lectures	16
Langue	English

Extrait

September 8, 2010

Mr. James Gunn

Technical Director

International Audit and Assurance Standards Board

545 Fifth Avenue, 14th Floor

New York, NY 10017

Re: Exposure Draft: Proposed International Standard on Assurance

Engagements 3420, “Assurance Reports on the Process to Compile Pro Forma

Financial Information Included in a Prospectus”

Dear Mr. Gunn:

The American Institute of Certified Public Accountants (AICPA) is pleased to comment

on the International Auditing and Assurance Standards Board’s (IAASB) proposed

International Standard on Assurance Engagements (ISAE) 3420, “Assurance Reports

on the Process to Compile Pro Forma Financial Information Included in a Prospectus,”

which deals with reasonable assurance engagements undertaken by a professional

accountant in public practice to report on the process to compile pro forma financial

information (PFI) included in a prospectus, where such reporting is required by

securities law or the regulation of the securities exchange in the jurisdiction in which

the prospectus is to be issued, or where this reporting is generally accepted practice in

such jurisdiction.

This letter provides our responses to the request for specific comments.

The AICPA’s Auditing Standards Board (ASB) does not intend to adopt or converge

with this exposure draft (ED). Our current standard on reporting on PFI—Chapter 4,

“Reporting on Pro Forma Financial Information,” of Statement on Standards for

Attestation Engagements No. 10,

Attestation Standards: Revision and Recodification

(AICPA,

Professional Standards

, vol. 1, AT sec. 401)—which we intend to clarify, has

served the U.S. environment well. A number of facets in the U.S. environment differ

significantly from the prospectus regime in the European Union (EU) such that

convergence simply is not possible. These facets include:

•

The focus of the ED is to obtain reasonable assurance about the process to

compile PFI and not on the PFI itself, whereas AT section 401 deals with

obtaining assurance on the reasonableness of management’s assumptions and

whether the PFI provides appropriate application and effect to those

assumptions. Reporting only on the process to compile would be confusing to

users who, at least in the U.S., expect an opinion on the PFI.

•

The ED expands on how ISAE 3000, “Assurance Engagements Other than

Audits or Reviews of Historical Financial Information,” is to be applied in a

reasonable assurance engagement to report on the process to compile PFI

included in a prospectus, whereas the applicability of AT section 401 is not

limited to PFI included only in a prospectus.

Page 2 of 3

ts; and

•

The ED describes an engagement whereby a practitioner plans and performs

procedures designed to obtain reasonable assurance on the process to compile,

which may be a higher level of assurance than that obtained by a practitioner on

the underlying historical financial information. We do not believe such reporting

should be permitted. Under AT section 401, the level of assurance obtained by a

practitioner on the PFI, as of a particular date or for a particular period, is limited

to the lowest level of assurance obtained on the historical financial statements.

We recognize that the objective of the engagement, subject to this ED, is to obtain

reasonable assurance on the process to compile and not on the presentation of the

result (that is, the PFI). Additionally, we recognize that in some regulatory jurisdictions,

this type of reporting is required. Therefore, notwithstanding our concerns expressed in

response to question 1, we believe that the work effort set forth in the ED is sufficient

and appropriate to express an opinion on the process to compile.

We understand that the second alternative (whether the PFI has been properly

compiled on the basis stated) has been provided to comply with the specific wording in

the EU Prospectus Directive. This alternative may be confusing to users who are

unfamiliar with the EU reporting regime because the word “process” is not included in

this wording even though the ED, in its entirety, discusses the process to compile PFI.

Users who are unfamiliar with the EU reporting regime may inappropriately assume or

believe that the practitioner is reporting on the PFI itself rather than on the process to

compile the PFI. Therefore, this reporting option should only be permitted where

required by law or regulation.

Furthermore, users may also misunderstand the two alternatives to believe that the

practitioner is reporting on

both

the process to compile the PFI and on the PFI itself,

notwithstanding the reporting language that states, “we have not performed an audit or

review of the pro forma financial information and, accordingly, we do not express an

opinion on the pro forma financial information.” To better highlight such cautionary

language, we suggest that this language be set out in a separate paragraph within the

practitioner’s responsibility section.

As stated above, this ED would not be responsive to the needs of U.S. users and,

as a result, we do not intend to adopt or converge with this ED. We would support the

development of an IAASB standard that is comparable to AT section 401 and that

contains, at a minimum, requirements and guidance on the following:

•

Evidence to support the reasonableness of management’s assumptions and

the PF

•

Underlying historical financial information that has been previously audited or

reviewed;

•

A reasonable or limited assurance engagement that limits the level of

assurance on the PFI to the lowest level of assurance obtained on the historical

financial statemen

•

Reporting on the PFI itself

The IAASB’s decision about whether it should undertake such a project should be

based on the needs of the various countries that do not have such a standard. If the

IAASB undertakes and issues such a standard, we would seriously consider

converging to that IAASB standard, assuming it was comparable to AT section 401.

Additionally, we are concerned about the appropriateness of the IAASB undertaking

projects that are jurisdictionally oriented. Although the explanatory memorandum of

this ED states that “… the IAASB decided on an approach focused initially on

identifying and understanding the reporting issues that arise in the context of one

jurisdiction that already has a recognized and established framework, and thereafter

expanding the consideration of the issues to other jurisdictions,” we believe this ED

could set an unintended precedent for the IAASB to undertake other jurisdictional

projects, regardless of the perceived validity of the circumstances or need for

immediate standards or guidance on a particular topic.

Thank you for the opportunity to comment on this exposure draft. If you have any

questions regarding the comments in this letter, please contact Andy Mrakovcic at +1-

212-596-6094,

amrakovcic@aicpa.org

Respectfully submitted,

Page 3 of 3

/s/ Darrel R. Schubert

Chair, Auditing Standards Board

Univers
Ebooks
Livres audio
Presse
Podcasts
BD
Documents

4571-comment-letter-on-isae-34

YouScribe

Le catalogue

Le service

Les conditions