Auditing Practices Board (APB) - Detailed Definition
The Auditing Practices Board (APB) was a key organization in the UK and the Republic of Ireland responsible for setting high standards of auditing practice. Established in 1991, the APB aimed to be more independent than its predecessor, the Auditing Practices Committee (APC), drawing half of its members from outside the auditing profession, including academia and the legal field. Its primary goals included:
- Establishing the highest standards of auditing practice.
- Ensuring the auditing standards met the evolving needs of financial information users.
- Maintaining public confidence in the auditing process.
In 2004, the APB became a subsidiary of the Financial Reporting Council (FRC), after which it continued to issue Practice Notes and Bulletins but was no longer authorized to issue Statements of Auditing Standards independently. In 2012, the APB was replaced by a new advisory body, the Audit and Assurance Council.
Examples
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Development of Practice Notes and Bulletins: The APB developed and published Practice Notes that provided practical guidance on how to apply auditing standards in specific contexts. These were essential for auditors to stay updated on best practices and regulatory requirements.
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Increasing Public Confidence: By involving members from universities and the legal profession, the APB aimed to bolster the objectivity and quality of the auditing standards, thereby increasing public trust in audited financial statements.
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Transition to Financial Reporting Council: Upon becoming a subsidiary of the FRC, the APB’s standards were more integrated with overarching financial reporting and governance frameworks, further solidifying the integrity of financial auditing.
Frequently Asked Questions
Q1: What led to the establishment of the Auditing Practices Board (APB)?
A1: The APB was established in 1991 to replace the Auditing Practices Committee (APC). It aimed to provide more independent and high-quality auditing standards by including members from outside the auditing profession, such as academia and the legal field.
Q2: What were the main objectives of the APB?
A2: The APB’s main objectives included establishing the highest standards of auditing practice, meeting the evolving needs of financial information users, and maintaining public confidence in the auditing process.
Q3: How did the APB maintain independence in its standards-setting process?
A3: The APB maintained independence by including half of its members from outside the auditing profession, ensuring a broad range of perspectives in its standard-setting efforts.
Q4: What happened to the APB in 2004?
A4: In 2004, the APB became a subsidiary of the Financial Reporting Council (FRC). From that point, it continued to publish Practice Notes and Bulletins but was no longer empowered to issue Statements of Auditing Standards independently.
Q5: When was the APB replaced and by what body?
A5: The APB was replaced in 2012 by the Audit and Assurance Council, an advisory body that continues the work of setting high standards in auditing practices.
Related Terms
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Auditing Practices Committee (APC): The predecessor to the APB, responsible for auditing standards until its replacement in 1991.
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Financial Reporting Council (FRC): A regulatory body overseeing accounting, auditing, and actuarial practices, which the APB became a part of in 2004.
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Audit and Assurance Council: The body that replaced the APB in 2012, continuing the advisory role in auditing standards.
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Statements of Auditing Standards (SAS): Guidelines issued to outline auditing procedures and practices.
Online References
Suggested Books for Further Studies
- “Auditing and Assurance Services” by Alvin A. Arens, Randal J. Elder, Mark S. Beasley, and Chris E. Hogan
- “Principles of Auditing & Other Assurance Services” by Ray Whittington and Kurt Pany
- “Auditing Concepts and Standards” by David N. Ricchiute
Accounting Basics: “Auditing Practices Board (APB)” Fundamentals Quiz
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