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State Board Report

December 2012

By July the International Federation of Accountants is going to release an exposure draft on what they believe the auditor’s report should look like, Jim Sylph, IFAC Executive Director-Professional Standards and External Relations, told the NASBA 2012 International Forum. “User groups, investors, analysts, pension funds say that what they are hearing from auditors is not enough,” Mr. Sylph stated. The auditor’s report needs to be changed, because “The reality is that if we don’t do it – it will be legislated away.” The International Auditing and Assurance Standards
Board has been weighing how they can get existing standards adopted around the world and “a report that will fit.” Over 80 jurisdictions are using, or have signaled their intent to use, International Standards on Auditing (ISAs), Mr. Sylph reported.

He characterized the United States’ “holdout attitude” as being a “challenge.” However, Mr. Sylph noted that while the United States is still the largest global market, it is smaller than it was ten years ago. The Big Four accounting firms have said they would have the most trouble in writing letters of comment to be included in the reports. “I don’t think the answer is the status quo,” he remarked.

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