ASB Issues Exposure Draft to Amend Various Clarified Auditing Standards


The AICPA’s Auditing Standards Board (ASB) issued Proposed Statement on Auditing Standards, Omnibus Statement on Auditing Standards—2011, resulting from its Clarity Project. The comment period ends May 15.

 

The proposed SAS contains amendments to the following:

 

  • SAS no. 117, Compliance Audits (AICPA, Professional Standards, AU sec. 801). The amendment conforms the auditor’s report on compliance with the requirements of the clarified SAS, Forming an Opinion and Reporting on Financial Statements. In addition, the amendment revises the appendix, “AU Sections That Are Not Applicable to Compliance Audits,” in SAS no. 117 to reflect conforming changes to affected references to AU sections as a result of the clarity project.
  • SAS no. 118, Other Information in Documents Containing Audited Financial Statements (AICPA, Professional Standards, AU section 550). The amendment clarifies the requirements with respect to identified material inconsistencies by categorizing the requirements based on when the inconsistencies are identified (prior to the date of the auditor’s report on the audited financial statements; after the date of the auditor’s report but prior to the report release date; and after the report release date). It also adds application material addressing electronic sites to include guidance from an interpretation of AU section 550, Other Information in Documents Containing Audited Financial Statements (AICPA, Professional Standards), which the ASB determined was appropriate to include in SAS no. 118.
  • Clarified SAS, The Auditor’s Communication With Those Charged With Governance (Redrafted). The amendment adds application material addressing situations when the auditor becomes aware that the entity is subject to an audit requirement that is not encompassed in the terms of the engagement. This requirement was previously in SAS no. 74, Compliance Auditing Considerations in Audits of Governmental Entities and Recipients of Governmental Financial Assistance.
  • Clarified SAS, Audit Documentation (Redrafted). The amendment places a requirement for the auditor to maintain the confidentiality of client information into generally accepted auditing standards (GAAS).
  • The ASB decided to withdraw SAS no. 26, Association With Financial Statements (AICPA, Professional Standards, AU section 504), and address its content through amendments to Statements on Standards for Accounting and Review Services, to the extent needed, and to the following clarified SASs:

 

The proposed SAS would be effective for audits of financial statements for periods ending on or after Dec. 15, 2012, except for the amendment to the clarified SAS, Reports on Application of Requirements of an Applicable Financial Reporting Framework, which would be effective for engagements that end on or after Dec. 15, 2012.

 

More from the JofA:

 

 Find us on Facebook  |   Follow us on Twitter  |   View JofA videos

SPONSORED REPORT

How the election may affect taxation of business income

This report summarizes recent proposals to reform the U.S. business income tax system and considers the path to enactment of any such legislation.

VIDEO

How to Excel pivot a general ledger

The general ledger is a vast historical data archive of your company's financial activities, including revenue, expenses, adjustments, and account balances. J. Carlton Collins, CPA, shows how to prepare data for, and mine data with, PivotTables.

QUIZ

Did you follow 2016’s biggest accounting news?

CPAs will remember 2016 as a year of new standards and new faces. How well did you follow the biggest accounting events? The 7 questions in this quiz will help you find out