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The AAO Weblog covers accounting issues and current events as they relate the practice of investment analysis. All posts prior to September, 2007 are in the public domain, but after September 4, 2007, only subscribers to The Analyst's Accounting Observer will see all posts going forward. Only selected, occasional posts will be released to the public domain from September 4 forward.

AS 5 Arrives
Location: BlogsAAO Weblog (Public)    
Posted by: Jack Ciesielski 7/26/2007 3:12 AM
Yesterday the SEC approved the PCAOB's Auditing Standard 5 - the replacement for the much-maligned Auditing Standard 2. Press release here.

The expected promises of AS 5: it'll provide for "scalable audits" that are less prescriptive and employ more auditor judgment about the necessity of the extent of testing. (Not that AS 2 didn't allow these audit traits.) It'll make for more efficient and less costly audits. We'll have to wait and see how effective such efficient audits will be under this new auditing model. One thing for certain: there's absolutely no excuse to absolve small firms from internal control examinations any longer. (Not that there ever was a good reason to do that.)
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