What’s going on with the audit rules?

In case there was not enough going on for your change-phobic auditor to deal with, all the audit rules are being rewritten.  Every one of them.

Why?  Trust me, that would take too long to explain and it really won’t be of interest to anyone except your CPA.

What is being done?  Every audit rule is being restructured so that the steps that are required are discussed at the front of the rule and all of the explanatory or descriptive comments are behind the requirements.  (As an illustration, one of the audit rules that may have been dozens of pages long before will now have just a few pages of requirements with lots of explanatory pages following.)  At the same time, there are a lot of small, new requirements being added to the restructured rules.

When will this go into effect?  At the moment, the audit rule makers think this be effective for audits of December 31, 2012 financial statements.  That means auditors will be implementing the rules for the first time starting in the January or February 2013 timeframe.  So there are a few more audit cycles to go before you see the impact.

What impact will you see in your ministry?  Well, your auditor may be a bit confused at the end of 2012 and frustrated during field work in 2013.  This is going to take a lot of work for us auditors to deal with.  Other impacts?  It will take time to adjust and there will be more audit work to be done.  That will translate into more time on the audit and therefore more cost. How much?  I don’t know, but it probably won’t be anywhere as bad as the last two massive rounds of changes, which were the fraud standard and the risk assessment rules.

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