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D17016 1 (2017-07-25)

handle is hein.gao/gaobadtqe0001 and id is 1 raw text is: cAO U.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Washington, DC 20548 July 25, 2017 Mr. Ken Siong Technical Director International Ethics Standards Board for Accountants 529 Fifth Avenue, 6th Floor New York, NY 10017 GAO's Response to the International Ethics Standards Board for Accountants' May 2017 Exposure Draft, Proposed Application Material Relating to Professional Skepticism and Professional Judgment Dear Mr. Siong: This letter provides GAO's response to the exposure draft, Proposed Application Material Relating to (a) Professional Skepticism - Linkage with the Fundamental Principles; and (b) Professional Judgment - Emphasis on Understanding Facts and Circumstances. GAO promulgates generally accepted government auditing standards (GAGAS) in the United States. GAGAS provides a framework for conducting high-quality audits of government awards with competence, integrity, objectivity, and independence. Our comments reflect the importance we place on reinforcing the values promoted in both the International Ethics Standards Board for Accountants (I ESBA) Code of Ethics for Professional Accountants (code) and GAGAS. We support IESBA's efforts to promote the application of professional skepticism in audits, reviews, and other assurance engagements by supplementing the code's existing references to professional skepticism. We believe that professional skepticism is a specific term applicable to professional accountants who perform audits, reviews, and other assurance engagements. The term has a slightly different meaning and connotes a different level of responsibility for professional accountants in business who should practice professional skepticism, but to a different extent. In our view, the meaning of the term and its importance to auditing and assurance engagements will be diminished and it will ultimately be interpreted differently if the concept is applied to all professional accountants. Specific Comments Proposed Application Material Relating to Professional Skepticism (para. 120. 13 A 1) 1. Do respondents agree that the proposed application material enhances the understandability of the conceptual framework in section 120 of the proposed restructured code? We support I ESBA's efforts to explain how compliance with the fundamental principles supports the exercise of professional skepticism in the context of audits, reviews, and other assurance engagements. However, we suggest that the application material be placed in section 110, The Fundamental Principles, of the code rather than in section 120, The Page 1

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