Other Auditors

Objective

Strengthen and modernize the existing requirements and impose a more uniform approach to the lead auditor's responsibilities, including the supervision of other auditors. 

Most Recent Action

On September 28, 2021, the Board issued a second supplemental request for comment on its proposed amendments relating to the planning and supervision of audits involving other auditors. The amendments, proposed by the Board in 2016 would, among other things: (i) rescind AS 1205, Part of the Audit Performed by Other Independent Auditors; (ii) amend AS 2101, Audit Planning, and AS 1201, Supervision of the Audit Engagement; and (iii) establish a new standard, AS 1206, Dividing Responsibility for the Audit with Another Accounting Firm. In 2017, the Board issued a first supplemental request for comment on certain revisions to the proposed amendments.

The second supplemental request seeks public comment on further revisions to the proposed amendments. Comments are due by November 30, 2021. 

Background

The roles of other accounting firms and individual accountants in audits (collectively, "other auditors") have taken on greater significance with the increasingly global operations of companies. The lead auditor often involves other auditors at various locations of the company, including in areas of the audit where there is a high risk of material misstatement in the financial statements. Working with other auditors can differ significantly from working with individuals in the same firm, creating challenges in the coordination and communication between the lead auditor and other auditors, including misunderstandings regarding the audit effort needed to meet the objectives of other auditors' work. Without adequate supervision by the lead auditor, deficiencies in other auditors' work can result in deficient audits.

Status

The staff is analyzing comments on the 2021 Supplemental Request for Comment and developing a recommendation for next steps for the Board’s consideration.

Resources