Auditing Standards Board (ASB)

What Is the Auditing Standards Board (ASB)?

The Auditing Standards Board (ASB) issues guidelines and rule pronouncements that certified public accountants (CPAs) must adhere to in audits and attestations.

Part of the American Institute of Certified Public Accountants (AIPCA), the Auditing Standards Board’s (ASB) mission is to serve the public interest by developing, updating, and communicating comprehensive standards and practice guidance for CPAs. A set of principles, known as generally accepted auditing standards (GAAS), are formulated, revised, and interpreted by the ASB in order to ensure that CPA practitioners provide high-quality, objective audit and attestation services to nonissuers in an effective and efficient manner. 

Key Takeaways

  • The Auditing Standards Board (ASB) issues auditing, attestation, and quality control statements, standards, and guidance to certified public accountants (CPAs).
  • A senior technical committee of the AIPCA, it is responsible for establishing generally accepted auditing standards (GAAS) for non-public companies.
  • The board is made up of 19 members representing various segments of the accounting industry.
  • For any rules or pronouncements to be approved, ASB members must vote on them and reach a two-thirds approval threshold.

Understanding the Auditing Standards Board (ASB)

The Auditing Standards Board (ASB) is a senior technical committee of the AIPCA, the foremost professional organization of CPAs in the United States. The AIPCA, which has issued guidance to accountants and auditors since 1927, created the Auditing Standards Board’s (ASB) in 1978 to replace previous technical committees, making it the highest authority in establishing auditing standards in the U.S.

The ASB is responsible for auditing, attestation, quality control, reporting, and performance monitoring. It exists to improve existing—and enable new—audit and attestation services, establishing the rules that accountants—professionals responsible for keeping or inspecting financial accounts—are supposed to abide by.

Up until the early 21st century, the Auditing Standards Board (ASB) was the premier authority of the GAAS. The hierarchy was then altered, following the introduction of the Sarbanes-Oxley (SOX) Act of 2002. That particular piece of legislation (which was passed to protect investors from fraudulent financial reporting by corporations), put the Auditing Standards Board (ASB) in control of standards and guidance to CPAs for non-public company audits.

The newly created Public Company Accounting Oversight Board (PCAOB), together with the Securities Exchange Commission (SEC), meanwhile, were given final authority over the auditing practices of public companies that trade on the stock market.

The Auditing Standards Board (ASB) governs non-public company audits, while the Public Company Accounting Oversight Board (PCAOB) and the Securities and Exchange Commission (SEC) set guidelines for audits prepared by public companies that trade on the stock market.

Special Considerations

Rulemaking Process

When considering and then making a pronouncement, Auditing Standards Board (ASB) membership will discuss it internally and with the AICPA. They may also involve the public. Its periodic meetings include discussion of auditing issues, the preparation of public statements, and might also include public hearings. 

For any rules or pronouncements to be approved, Auditing Standards Board (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") of a final rule.

The Auditing Standards Board (ASB) publicizes its pronouncements and statements in The CPA Letter and via the AICPA website.

Membership Structure

The Auditing Standards Board (ASB) is made up of 19 members, each of which 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 chair, has the power to establish procedures and sub-committees, in addition to other related duties. The AICPA ensures that the Auditing Standards Board (ASB) is diverse by reserving member seats for various segments of the accounting industry.

Typically, seats will be distributed fairly evenly among individuals representing the following organizations:

  • The “Big Four" accounting firms.
  • Local, regional, or national-level accounting firms that are not associated with the "Big Four."
  • National Association of State Board of Accountancy (NASBA) representatives.
  • Various other public accountants that are AICPA members or private practitioners, such as academics, government-employed auditors, or other public officials.
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  1. Auditing Standards Board. "ASB Auditing Standards Board." Accessed Dec. 25, 2020.

  2. Auditing Standards Board. "Generally Accepted Auditing Standards." Accessed Dec. 25, 2020.

  3. U.S. Congress. "H.R.3763 - Sarbanes-Oxley Act of 2002." Accessed Dec. 25, 2020.

  4. Auditing Standards Board. "Auditing, Attestastion and Quality Control Standards Setting Activities," Page 1-22 Accessed Dec. 25, 2020.

  5. Auditing Standards Board. "Audit Standards Board Members' Biographies." Accessed Dec. 25, 2020.