AU Section 9311

Planning and Supervision: Auditing Interpretations of Section 311

[Superseded, effective for audits of fiscal years beginning on or after December 15, 2010. See PCAOB Release No. 2010-004.]

1.    Communications Between the Auditor and Firm Personnel Responsible for Non-Audit Services


Question—Section 311, Planning and Supervision, paragraph .04b, lists the following procedure that an auditor may consider in planning an audit: "Discussing matters that may affect the audit with firm personnel responsible for non-audit services to the entity."


What specific things should the auditor consider in performing this procedure?


Interpretation—The auditor should consider the nature of non-audit services that have been performed. He should assess whether the services involve matters that might be expected to affect the entity's financial statements or the performance of the audit, for example, tax planning or recommendations on a cost accounting system. If the auditor decides that the performance of the non-audit services or the information likely to have been gained from it may have implications for his audit, he should discuss the matter with personnel who rendered the services and consider how the expected conduct and scope of his audit may be affected. In some cases, the auditor may find it useful to review the pertinent portions of the work papers prepared for the non-audit engagement as an aid in determining the nature of the services rendered or the possible audit implications.

[Issue Date: February, 1980.]

[2.] Planning Considerations for an Audit of a Federally Assisted Program


[Withdrawn March, 1989.]

3.    Responsibility of Assistants for the Resolution of Accounting and Auditing Issues


Question—Section 311, Planning and Supervision, paragraph .14, states, "The auditor with final responsibility for the audit and assistants should be aware of the procedures to be followed when differences of opinion concerning accounting and auditing issues exist among firm personnel involved in the audit." What are the responsibilities of assistants when there are disagreements or concerns with respect to accounting and auditing issues of significance to the financial statements or auditor's report?


Response—Rule 201 of the Code of Professional Conduct [ET section 201.01] states that a member shall "Exercise due professional care in the performance of professional services." The discussion of the third general standard [section 230, Due Professional Care in the Performance of Work, paragraph .02] states that "due care imposes a responsibility upon each person within an independent auditor's organization to observe the standards of field work and reporting." The first general standard requires assistants to meet the responsibility attached to the work assigned to them.


Accordingly, each assistant has a professional responsibility to bring to the attention of appropriate individuals in the firm, disagreements or concerns the assistant might have with respect to accounting and auditing issues that he believes are of significance to the financial statements or auditor's report, however those disagreements or concerns may have arisen. In addition, each assistant should have a right to document his disagreement if he believes it is necessary to disassociate himself from the resolution of the matter.

[Issue Date: February, 1986.]

[4.]    Audit Considerations for the Year 2000 Issue


[Withdrawn July, 2000 by the Audit Issues Task Force.]

Copyright © 2004, American Institute of Certified Public Accountants, Inc.