Guidance issued on performing audits for privately held companies.

• Position: Brief Article

The AICPA recently distributed a letter to managing partners of firms that perform audits in response to auditors and their clients raising questions regarding the applicability and appropriateness of applying standards established by the Public Company Accounting Oversight Board to an audit of an entity not subject to Sarbanes-Oxley or the Securities and Exchange Commission ("non-issuers").

The letter provides insight into audits and audit reports of nonissuers, including privately held businesses, not-for-profits and governmental entities. It addresses several issues, including reminding auditors that the Code of Professional Conduct Rules 201 and 202 apply to an audit of a non-issuer and that the auditor must still follow auditing standards established by the AICPA. The letter also advises that if the auditor also follows the standards established by the PCAOB, that the...