ASB issues standard for auditors involved with exempt offering documents

A new auditing standard issued by the AICPA Auditing Standards Board (ASB) establishes when an auditor is involved with an exempt offering document—and describes the procedures an auditor is required to follow when involved with such a document.

Statement on Auditing Standards (SAS) No. 133, Auditor Involvement With Exempt Offering Documents, does not amend or supersede any previous guidance and will take effect for exempt offering documents that are initially distributed, circulated, or submitted on or after June 15, 2018.

An auditor’s involvement with an exempt offering document is established under SAS No. 133 if both of the following occur:

• The auditor’s report on financial statements or the auditor’s review report on interim financial information is included or incorporated by reference in an exempt offering document; and
• The auditor performs one or more specified activities with respect to the exempt offering document. These activities include:
  • Assisting the entity in preparing information included in the exempt offering document.
  • Reading a draft of the exempt offering document at the entity’s request.
  • Issuing a comfort or similar letter in accordance with AU-C Section 920, Letters for Underwriters and Certain Other Requesting Parties, or an agreed-upon procedures report in accordance with AT-C Section 215, Agreed-Upon Procedures Engagements, in lieu of a comfort letter or similar letter on information included in the exempt offering document.
  • Participating in due-diligence discussions with underwriters, placement agents, broker-dealers, or other financial intermediaries in connection with the exempt offering.
  • Issuing a practitioner’s attestation report on information relating to the exempt offering.
  • Providing written agreement for the use of the auditor’s report in the exempt offering document.
  • Updating an auditor’s report for inclusion in the exempt offering document.

When an auditor is involved with an exempt offering, SAS No. 133 requires the practitioner to perform procedures described in Paragraphs 6—16 of AU-C Section 720, Other Information in Documents Containing Audited Financial Statements, on the exempt offering document.

In addition, SAS No. 133 requires the auditor to perform procedures designed to identify events occurring between the date of the auditor’s report and the date of distribution, circulation, or submission of the exempt offering document that may have caused the auditor to revise the auditor’s report had the events been known to the auditor as of the date of the report.