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National Association of State Boards of Accountancy proposes tighter scrutiny of audit reviews

National Association of State Boards of Accountancy proposes tighter scrutiny of audit reviews

by Rick Turoczy on September 15, 2004

CPA firms doing compilations, reviews or audits could get closer scrutiny under model rules proposed by Nashville-based National Association of State Boards of Accountancy.

Under the new rules, firms would be required to report adverse quality-control reviews of their operations to state licensing boards, which have the power to initiate enforcement proceedings. In addition, individual CPAs would have to apprise the licensing boards of any civil charges brought against them in instances of fraud, violation of standards of practice or misappropriation of funds.

The Sarbanes-Oxley Act of 2002, as well as best practices recommended by NASBA to all state boards based on actions already undertaken by some states, were instrumental in bringing about the model rules. The Tennessee State Board of Accountancy has not adopted the rules yet, but is looking into them, says Linda Biek, executive director of Tennessee State Board of Accountancy. The rules were brought before a review committee during the board’s Aug. 23 meeting. Because of confidentiality restrictions in place, a series of steps must be taken at the state level to loosen those restrictions, so Tennessee probably won’t adopt the model rules for a couple of years.

National Association of State Boards of Accountancy proposes tighter scrutiny of audit reviews

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