The Clarity Standards Impact Content Tested on the Auditing and Attestation Section (AUD) of the CPA Exam in 2013

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The Clarity Standards will have an impact on what CPA candidates will need to know for the AUD portion of the CPA exam. The most significant changes will be made to the auditor's report. The Clarity Standards will impact those CPA Candidates testing on or after July 1, 2013. The Gleim AUD materials will be updated to include all changes made to the material tested on AUD.

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The biggest change is to the auditor's report. The new report will have headings for each section and will be more explicit in defining the responsibilities for the financial statements and for the audit.

The Auditing and Attestation section of the CPA exam will undergo major changes in the content tested beginning in the third quarter of 2013. The Auditing Standards Board's (ASB) clarified auditing standards are effective for periods beginning after December 15, 2012. Thus, the clarified standards are eligible to be tested on the 2013 CPA Exam beginning in July, which is the third window of 2013 testing.

According to Dr. Bill Hillison, Professor Emeritus of Accounting at Florida State University and co-author of Gleim CPA Review Auditing materials, “The AICPA’s Auditing Standards Board redrafted its standards into a new Codification of Statements on Auditing Standards to make U.S. Generally Accepted Auditing Standards (GAAS) easier to read, understand, and apply. A goal of the ASB was to converge the standards with the International Standards of Auditing (ISA) and to eliminate the duplication that existed in the current standards.”

The scope of these changes is leaving CPA candidates wondering where to begin in understanding the differences between the old and new standards. Reed Daines, a recent graduate from the Fisher School of Accounting at the University of Florida who is currently studying for the CPA exam, states, “I'm taking the Auditing section of the CPA Exam next Fall. I'm concerned because I just studied all of the SASs in my Auditing class last Spring. I need to know if I have to go back and study them all over again.”

“It's not as bad as it looks,” says Dr. Hillison. “While there are some areas that dramatically changed, many of the standards remain basically the same conceptually.”

Dr. Hillison continues, “The biggest change is to the auditor's report. The new report will have headings for each section and will be more explicit in defining the responsibilities for the financial statements and for the audit. Additionally, the term 'unqualified opinion' will be replaced with the term 'unmodified opinion.' In another change, a new standard on 'group audits and component auditors' replaces the existing standard on the use of 'other auditors.' The term 'explanatory paragraph,' which is currently used to draw attention to special items, is replaced with either an 'emphasis-of-matter' or 'other-matter' paragraph. No longer will the standards refer to 'special reports.' These are subsumed into various other standards on reporting responsibilities.”

Dr. Gleim, CEO of Gleim Publications, Inc and expert on CPA test preparation, suggests that candidates plan to take the Auditing and Attestation section by the end of the January/February window in 2013 to avoid having to study the new codification for the exam (This provides a buffer of the next window if the candidate needs to retake the part). “Of course,” he concedes, “not everyone will be able to plan their schedule in this manner.” To address the concerns of those candidates who must take the exam in the third testing window or later, Dr. Gleim and Dr. Hillison have created a special edition of the CPA Review Auditing materials to be released in the spring of 2013.

The Gleim CPA Review System includes 18-months of product replacement and updates so you always have the most current materials. Candidates should continue to take their exams without worrying about materials changing. Gleim will provide the new AUD edition as soon as it's available to candidates who have purchased a complete Review System or Review System part (BEC, AUD, FAR, or REG).

If you would like to read more about the changes in the content of the standards, visit thegleimblog's Academic Corner and read the post titled “Clarity Standards” by guest blogger Dom Savini. CPA candidates should contact the experts at Gleim Publications for more information or advice on how to study for and pass the exam before the new standards are testable.

You can try a complimentary demo of the Gleim CPA Review System here. All you have to do to begin is create an account.

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