AICPA Issues Exposure Drafts Related to Fraud and Noncompliance With Laws and Regulations

The AICPA Auditing Standards Board has issued a proposed Statement on Auditing Standards (SAS), Inquiries of the Predecessor Auditor Regarding Fraud and Noncompliance With Laws and Regulations, which would require an “auditor, once management authorizes the predecessor auditor to respond to inquiries from the auditor, to inquire of the predecessor auditor regarding identified or suspected fraud or noncompliance with laws or regulation.” Comments on the proposed SAS are due by June 30, 2021.

In addition, the AICPA’s Professional Ethics Executive Committee has issued an exposure draft, Proposed Interpretations and Definition: Responding to Noncompliance With Laws and Regulations, which would provide guidance related to “encountering a NOCLAR [noncompliance with laws or regulations] at a client or within the employing organization.” Comments on the exposure draft are due by June 30, 2021.