At the OECD Forum earlier this week, a couple people told us about a new rumor floating around concerning the Independent Private Sector Audits (IPSAs). According to speculation, interests for CPA auditors are pushing for the SEC to eliminate the option for issuers to engage non-CPA auditors to conduct IPSAs. We don’t know if this is true or not, but the claim is generating some buzz in industry.
Even if the rumor is true, we don’t think there is much likelihood of success. When we were asked to be a panelist to the Commission’s 2011 Conflict Minerals Roundtable, the basis of our participation was presenting the non-CPA perspective on the IPSAs – including costs and applicability of the Performance Audit standards. The SEC staff demonstrated a sensitivity to IPSA costs and opening doors to competition in the market to help. We don’t think this will change.
Other important points to remember:
- SEC’s economic impact analysis included the use of, and cost differentials between, CPAs and non-CPAs for IPSAs;
- The GAO, who has responsibility for matters pertaining to the audit standards as mandated by the law itself, stated that no specific audit standard is needed for the IPSAs and that the GAGAS audit standards “will be applicable”;
- The GAGAS audit standards include and allow for both Attestations and Performance Audits; and
- The SEC stated in Question 13 of their FAQs that “an auditor other than a certified public accountant may perform the IPSA pursuant to the Yellow Book’s Performance Audit provisions.”