Paper documents
Comment Letter

Comment letter: Omnibus Statement

May 15, 2018

Ms. Sherry Hazel Auditing Standards Board

American Institute of Certified Public Accountants

1211 Avenue of the Americas

New York, NY 10036-8775

Proposed Statement on Auditing Standards, Omnibus Statement on Auditing Standards—2018

Dear Ms. Hazel:

We appreciate the opportunity to comment on the exposure draft referenced above.

By way of background, Baker Tilly Virchow Krause, LLP is a large nationally recognized accounting firm operating primarily in the Midwest and Northeast regions of the United States. We have approximately 300 partners and employ over 2,700 persons. Our practice is diverse, offering accounting and auditing services as well as tax and consulting services across a broad spectrum of industries and geographies.

Effective Date

We believe an effective date of less than a year from the date that the proposed standard is finalized will not allow auditors sufficient time to update their audit methodologies, therefore, we recommend that the proposed effective date be at least one year from the date that the proposed standard is finalized.

Our remaining comments will be in the form of responses to specific questions included in the exposure draft and other specific observations and recommendations.

  1. _As described previously, amendments are proposed to define significant unusual transactions and to use the term consistently throughout GAAS. The ASB believes that audit quality may be enhanced if the use of the term significant unusual transactions were to be consistent between GAAS and PCAOB standards. A definition of significant unusual transactions as “significant transactions that are outside the normal course of business for the entity or that otherwise appear to be unusual due to their timing, size, or nature” is proposed as an amendment to AU-C section 240. Alternatively, the phrase “significant transactions that are outside the normal course of business or that otherwise appear to be unusual” could be used consistently throughout GAAS; currently the phrase “that otherwise appear to be unusual” is not always included. Please provide your views on the use of the phrase “significant unusual transactions” instead of the phrase “significant transactions that are outside the normal course of business or that otherwise appear to be unusual” consistently throughout GAAS.We agree that the consistent use of the term “significant unusual transaction” will enhance audit quality and with the proposed definition of significant unusual transaction, although, we recommend that “, for example,” be inserted between “otherwise appear to be unusual” and “due to their timing, size or nature” to make it clear that transactions can appear to be unusual for reasons other than their timing, size or nature._
Other Specific Observations and Recommendations

We recommend that “accomplish the following” be removed from paragraph 32 of AU-C section 240 as we do not believe that the additional wording adds any value to the requirement.

It appears that paragraph 12f of AU-C section 260 should be referenced to the application guidance in paragraph A36. In addition, we believe that further application guidance regarding the types of complaints or concerns to which this paragraph refers should be added.

We believe that adding application guidance regarding the timing of the performance of the procedures described in paragraphs 14, 15 and 16 of AU-C section 550 would be helpful.

We appreciate the opportunity to provide the above comments and are available for further discussion with the Board if that would be useful to the process. Should you wish to discuss any of these comments, please contact David Johnson, Professional Practice Group Partner, at 608 240 2422.



For more information on this topic, or to learn how Baker Tilly assurance specialists can help, contact our team.

Two people look at audit report
Next up

Comment letter: Auditor's responsibilities in annual reports