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C00466 1 (2011-09-16)

handle is hein.gao/gaobadvxx0001 and id is 1 raw text is: ~G A 0 A ointabillty I integrity I Reiability United States Government Accountability Office Washington, DC 20548 September 16, 2011 Technical Director International Auditing and Assurance Standards Board 545 Fifth Avenue, 14' Floor New York, New York 10017 Subject: International Auditing and Assurance Standards Board (JAASB) May 2011 Consultation Paper entitled 'Enhancing the Value ofAuditor Reporting: Exploring Options for Change. This letter provides the U.S. Government Accountability Office's (GAO) comments on the JAASB's Consultation Paper on enhancing the value of the auditor's report. We support the general premise of enhancing the auditor's report, and believe that this Consultation Paper is a positive step toward improving the transparency and relevance of these reports. We believe that several of the suggestions, specifically, those relating to an expanded description of the respective responsibilities of management and the auditors, an explanation of technical terms, the enhanced use of Emphasis of Matter and Other Matter paragraphs, and including a statement on the auditor's responsibility for, or involvement with, other information, will help make the auditor's report more useful to the reader. While we believe that the current pass/fail reporting model should be retained as an effective means to encourage management to provide all appropriate disclosures, the above suggestions for improving the auditor's report -- the auditor's primary means of communicating audit results -- should be considered. GAO and others in the federal audit community have had significant experience in enhanced reporting in these areas. Attached is an illustrative audit report from the GAO/PCIE FinancialAudit Manual.' Consistent with both the auditing standards and years of accepted practice, management of the audited entity is responsible for the fair presentation of the entity's financial statements, including disclosure of all information required by the applicable financial reporting framework, and the role of the auditor is to assess the fair presentation of the financial statements, including the completeness of management's disclosures. If there is a situation in which management does not provide the required disclosures, or such disclosures are not fairly presented, then the auditor considers the effect on the auditor's opinion and report. 'FAM/PCIE Section 595 A - Example of Unqualified Financial Statement, Internal Control Opinion, and Opinion on Substantial Compliance of Entity's Systems with FFMIA GAO special publications website: (http//www.gao gov/svecial. pubs/ ao cie!)

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