In July, the U.S. Government Accountability Office (GAO) released its latest revision of Generally Accepted Government Auditing Standards (GAGAS)—also called the Yellow Book—which supersedes the 2011 version. Yellow Book standards are used for audits of governmental agencies, usually on the federal level, as well as for audits of the private entities that contract with them. Susan M. Barossi, chair of the NYSSCPA’s Government Accounting and Auditing Committee, said that the major difference between the 2011 and 2018 versions involves presentation.

Last year, the Public Company Accounting Oversight Board (PCAOB) adopted a new standard that will significantly expand the auditor’s report, requiring auditors to disclose any “critical audit matters” (CAMs) that they encounter during their audits. With the implementation dates of this new standard fast approaching, the PCAOB has been working with companies conducting “dry runs” of the standard.

On March 15, 2018, the NYSSCPA will hand off its peer review administration responsibilities to the Pennsylvania Institute of CPAs (PICPA). As of that date, the PICPA will become the administering entity (AE) for New York state CPA firms that are required to undergo peer review, meaning all firms that perform attest services, as well as firms that include members of the American Institute of CPAs (AICPA) and perform work for which that organization requires peer review.

More time, more risk and more expense—this is what auditors expect will be the effect of a recent Public Company Accounting Oversight Board (PCAOB) measure expanding the standard auditor’s report. Under the rule, formally approved by the board on June 1, the standard auditor’s report will include, among other things, the communication of “critical audit matters (CAM),” or information that the PCAOB believes investors and other users would find relevant.

A bill (S6026A/A7895A) that would require mandatory peer review for all CPA firms in New York state that do attest work was passed in the Senate and Assembly in June and now requires only Gov. Andrew Cuomo’s signature to become law.  The Society advocated for passage of the act, which eliminates an exemption from mandatory peer review for firms with two or fewer CPAs, in order to protect the public interest by ensuring best practices among all CPA firms that perform audits.