In 2009, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. (SFAS) 167 (ASC 810), which broadens the number of entities that will consolidate formerly unconsolidated offbalance sheet assets and liabilities, and otherwise greatly changes the framework for consolidated financial statements. While the literature provides some examples of accounting for Variable Interest Entities (VIEs), little discussion examines how to audit such VIEs, which is important in light of some related audit failures. In this article, the authors summarize the provisions of SFAS 167 and discuss the auditing implications. They also discuss how recent International Financial Reporting Standards affect how entities should account for and audit VIEs. © 2013 Wiley Periodicals, Inc.