AICPA’s New Direct Examination Engagements Standard Uses a Practitioner’s Expertise when Evaluating Nonfinancial Information

The American Institute of CPAs’ (AICPA) Auditing Standards Board (ASB) has issued Statement on Standards for Attestation Engagements (SSAE) No. 21, which adds a new section in AICPA Professional Standards designated as AT-C section 206, Direct Examination Engagements.

“While maintaining the ability to perform traditional ’assertion-based’ examination engagements, this new engagement allows practitioners to use their highly valued skills and expertise to measure or evaluate different types of nonfinancial subject matters against criteria and report the results of their work directly to users, thereby furthering the public interest,” said Tracy Harding, CPA, AICPA Auditing Standards Board Chair. “The entity responsible for the underlying subject matter is not required to expend resources in measuring or evaluating the subject matter against criteria. The new service is expected to be useful given the ever-expanding types and complexities of nonfinancial subject matters.”

SSAE No. 21 enables the practitioner to provide an opinion, without another party responsible for the underlying subject matter having first measured or evaluated the subject matter. The service will be helpful with new and emerging nonfinancial subject matters, since many entities may not have the expertise in-house to measure or evaluate a complex, emerging subject matter.