Rules and Regulations

Rules and Regulations

Brittney Bassett

ACCT 422.6380

Professor Anderson

January 27, 2013

Rules and Regulations

Auditors have to follow all rules and regulations that are put into effect. These rules and regulations may be from the IRS, GAAS, some even come from the PCAOB. New rules and regulations, as well as standards come into the auditing world throughout the decades. As things happen in the economy, new rules and regulations come into effect and auditors are required to keep up with them and know what they mean.

The American Institute of Certified Public Accountants otherwise known as AICPA, sets standards for auditing through the Auditing Standards Board. They also have a Code of Professional Conduct that CPAs are required to maintain. There are many ways for auditors to stay up to date on new rules and regulations. One of these ways is through publications that are put out, like the Journal of Accountancy, as well as through the websites of the AICPA and PCOAB. The AICPA also puts out the CPA Letter Daily, which is an email alert about professional issues that are starting to emerge (Arens, Elder, & Beasley, 2012, p. 30).

SAS Nos. 122-125 also known as the Clarified Auditing Standards is one of the newer changes that has recently gone into effect. Auditors have to know what these changes mean. In other words, what parts of the audit are going to be affected by the new standards. One part of this new standard is that verbal confirmations are no longer appropriate. All requests and conformation needs to be in writing (Donat, 2012). This may make the audit take longer, as the auditor will have to wait on the written communications. This may require extra effort from the client as well as the client’s vendors, or customers. The auditors also have to make sure that the clients understand the new rules and regulations also. This may take time as auditors have to discuss with each client how these changes affect each individual client....