What is the 'Auditing Standards Board (ASB)'

The Auditing Standards Board (ASB), part of the AICPA, issues guidelines and rule pronouncements that CPAs must adhere to in audits and attestations. The ASB's mission is to serve the public interest by developing, updating and communicating comprehensive standards and practice guidance that enable certified public accountant practitioners to provide high-quality, objective audit and attestation services to nonissuers in an effective and efficient manner. It is a senior technical committee of the American Institute of Certified Public Accountants (AIPCA) and was created in 1978 to replace previous technical committees to be the highest authority in establishing generally accepted auditing standards (GAAS) in the United States.

Breaking Down 'Auditing Standards Board (ASB)'

As described by the AICPA, which has issued guidance to accountants and auditors since 1927, the Auditing Standards Board is its senior technical committee for auditing, attestation, quality control, reporting and performance monitoring. The ASB produces statements, standards and guidance to certified public accountants for non-public company audits. The Auditing Standards Board exists to improve existing and enable new audit and attestation services.

Auditing Standards Board Structure

The Auditing Standards Board is made up of 20 members that are nominated by the director of the AICPA Audit and Attest Standards Staff. Each nominee must be approved by the AICPA Board of Directors. The board, as directed by its chairman, has the power to establish procedures and sub-committees, in addition to other related duties. The AICPA ensures that the ASB is diverse by reserving member seats for various segments of the accounting industry. For example:

  • Four seats that represent the Big Four" accounting firms.
  • Five seats for local, regional or national-level accounting firms that are not associated with the "Big Four."
  • Five seats for National Association of State Board of Accountancy representatives.
  • Six seats for various other public accountants that are AICPA members or private practitioners. These seats are typically reserved for academics or government-employed auditors or other public officials.

Auditing Standards Board Rulemaking Process

When considering and then making a pronouncement, ASB membership will discuss it internally, with the AICPA, and may also involve the public. Its periodic meetings include discussion of auditing issues, the preparation of public statements, and may also include public hearings. For any rules or pronouncements to be approved ASB members must vote on them and reach a two-thirds approval threshold. At that point, they may produce a draft proposal (or "exposure draft") or a final rule. The ASB publicizes its pronouncements and statements in The CPA Letter and via the AICPA website.

RELATED TERMS
  1. Auditing Evidence

    Auditing evidence is information collected to review a company's ...
  2. Audit

    An audit is an unbiased examination and evaluation of the financial ...
  3. Correspondence Audit

    A correspondence audit is a type of tax audit performed by mail.
  4. Performance Audit

    A performance audit is an examination of a program, usually in ...
  5. Accounting Trends and Techniques ...

    Accounting Trends and Techniques are prominent publications put ...
  6. Audit Risk

    Audit risk is the risk that the financial statements are materially ...
Related Articles
  1. Taxes

    How Does An IRS Audit Work?

    It doesn't automatically mean an IRS agent will be ringing your doorbell. Here are the different types of IRS audits and how to handle them.
  2. Personal Finance

    A Day In The Life Of An Auditor

    If you like the idea of examining and attesting to a company's financial performance for a living, a career in auditing might be right for you.
  3. Financial Advisor

    SEC Audit? No Problem (If You're Prepared)

    Audits are unwanted and unpleasant, but by getting your proverbial ducks in a row ahead of time you can ease and simplify the process.
  4. Taxes

    Surviving The IRS Audit

    Keeping thorough records and knowing the penalties make this experience easier than you'd expect.
  5. Personal Finance

    The CPA Exam: What You Need to Know

    Interested in becoming a certified public accountant? What you need to know for the CPA exam.
  6. Taxes

    America's Missing $15 Billion in Corporate Taxes

    The “Starve the IRS” strategy cuts the supply of corporate auditors. Result: Big-money tax cheats go free and ordinary taxpayers pay every penny they owe.
  7. Personal Finance

    Common interview questions for internal auditors

    Identify some of the most common questions asked during internal auditor job interviews, and learn the best responses to put you ahead of your competition.
  8. Investing

    Financial History: The Rise of Modern Accounting

    How government regulation and the modern accounting profession grew hand-in-hand.
  9. Managing Wealth

    What internal auditors do – and how much they make

    Learn about what an internal auditor does in their job, as well as the median salary, education and certifications required to head down that career path.
RELATED FAQS
  1. What are some examples of inherent risk?

    Here, we define the nature of inherent risk in preparing and executing financial audits and explain its prevalence in the ... Read Answer >>
  2. How important are contingent liabilities in an audit?

    Read about the importance of contingent liabilities during an audit, why audits are necessary and how contingent liabilities ... Read Answer >>
  3. What is the difference between a compiled and a certified financial statement?

    All publicly-traded companies are required to provide financial statements, including a balance sheet, cash flow statement ... Read Answer >>
Trading Center