Who understands audit reports?

Article Abstract:

The way in which two statements on auditing standards (SAS) affected users' ability to understand audit reports was investigated. Auditing practitioners and faculty were surveyed about their understanding of audit reports as a result of the Auditing Standards Board's (ASB) introduction of SAS 58 and SAS 59, both of which were designed to improve user understanding. The results indicated that the respondents felt that SAS 58, which made changes to the standard auditor's report, will increase understandability. Approximately 50% of the respondents felt that users will not be able to understand the new format of the report. The respondents generally had doubts about the overall impact of SAS 58 and SAS 59, which indicates that the ASB should conduct additional research on this issue.

Analysis, Auditing, Surveys, Accounting Standards Board, Corporation reports, Company reports, Comprehension

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SFAS 96 will lead to changes in the format of accountants' workpapers

Article Abstract:

Statement of Financial Accounting Standards (SFAS) 96, which deals with accounting for interperiod timing differences, has changed the technique for accounting for income taxes by increasing the need to concentrate on future originating and reversing differences. SFAS 96 requires that hypothetical future tax returns be developed for the amounts of temporary differences. One of the primary changes brought about by SFAS 96 is the change in the way accountants keep records. Accountants must calculate the amount of deferred taxes as if a tax return for the net amount of future temporary differences at known future rates has been prepared. SFAS 96 will increase interpretability of the deferred tax balance, but it will also increase complexity.

Tax accounting, Accounting and auditing, Accounting, Income tax

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