Why Not Adopt U.S. GAAS?
Sylph said he believes that adoption of U.S. GAAS as a basis for international auditing standards would not work. U.S. standards were written in a highly litigious environment, which doesn’t exist to the same extent in other parts of the world. Also, many countries would not accept “Made in America” standards. The quality of international auditing standards is very close to U.S. GAAS, Guy said, but gaps do exist (e.g., in the addressing of claims arising out of litigation. U.S. GAAS has a whole statement on the topic, whereas international standards have just a paragraph or two). Carmichael pointed out that in some areas, such as illegal acts, international standards are more rigorous than GAAS. Future Projects Overhauling the Audit Risk Model. An important project currently under way among Canadian, U.K., and U.S. auditing standards setters involves rethinking the audit risk model. The SEC asked the POB Panel on Audit Effectiveness to determine whether the trend toward risk-based audi
