Amendments clarify jurisdictional issues in audits

SAS No. 131 addresses reporting requirements.

The AICPA Auditing Standards Board clarified the format of certain reports by auditors made outside of the PCAOB's jurisdiction.

The AICPA Code of Professional Conduct (the Code) requires members conducting audits under the PCAOB's jurisdiction to conduct the audits in accordance with the standards of the PCAOB, but such audits are not also required to be conducted in accordance with generally accepted auditing standards (GAAS).

Statement on Auditing Standards (SAS) No. 131 clarifies how auditors should proceed when an audit is not under the jurisdiction of the PCAOB, but the entity desires or is required by an agency, regulator, or contractual agreement to obtain an audit conducted in accordance with PCAOB standards. In these circumstances, the Code requires the auditor to also conduct the audit in accordance with GAAS.

Examples of entities whose audits are not within the PCAOB's jurisdiction include:

  • Clearing agencies and futures commission merchants registered with the Commodity Futures Trading Commission (CFTC).
  • Certain other entities registered with the CFTC that are not also SEC-registered brokers and dealers.

SAS No. 131 also addresses how the reporting requirements of GAAS differ from the PCAOB's auditing standards. When the auditor refers to the PCAOB's standards in addition to GAAS in the auditor's report, SAS No. 131 requires the auditor to use the form of report required by PCAOB standards, amended to state that the audit also was conducted in accordance with GAAS.

The amendments take effect for audits of financial statements for periods ending on or after June 15, 2016. Early application is permitted.


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