AICPA looks to restore investor confidence
The chief US accounting institute has launched its own initiative aimed at restoring investor confidence in the accounting industry, following the controversial Sarbanes-Oxley Act.
In a move aimed at stamping out corporate fraud, the American Institute of Certified Public Accountants has instructed auditors to ‘approach every audit with professional scepticism and not assume that management is honest’ as part of a new standard called SAS 99.
‘It puts fraud at the forefront of the auditor’s mind,’ said Barry Melancon, chief executive of the AICPA.
SAS 99 calls on auditors to ‘put aside any prior beliefs as to management’s honesty’ and says members of the audit team ‘must exchange ideas or brainstorm how frauds could occur’.
In addition the audit team is ‘expected to inquire of management and others in the organisation as to the risk of fraud and whether they are aware of any frauds’.