June 6, 2011 letter commenting on the IAASB's January 2011 Discussion Paper, "The Evolving Nature of Financial Reporting:
Disclosure and Its Audit Implications"
Jun 6, 2011
This letter provides the U.S. Government Accountability Office's (GAO) comments on the IAASB's January 2011 Discussion Paper entitled "The Evolving Nature of Financial Reporting: Disclosure and Its Audit Implications." We support the Board's efforts to clarify the auditor's responsibilities related to auditing financial statement disclosures. Also, we support development of principle-based guidance, either as a standard or other guidance, for evaluating disclosures that builds on the existing requirements in the International Standards on Auditing (ISAs). Such guidance can improve the consistency and effectiveness of auditing disclosures. In developing such guidance, we suggest the Board consider developing or strengthening existing guidance in the following areas: (1) developing uniform criteria for evaluating disclosures, (2) providing additional guidance on evaluating qualitative disclosures, and (3) clarifying the extent of the auditor's responsibilities for auditing disclosures.