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Auditing Standards Board issues Statement on Auditing Standards No. 126

Please note: This item is from our archives and was published in 2012. It is provided for historical reference. The content may be out of date and links may no longer function.

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The AICPA’s Auditing Standards Board (ASB) issued Statement on Auditing Standards (SAS) No. 126, The Auditor’s Consideration of an Entity’s Ability to Continue as a Going Concern (Redrafted), as a result of its Clarity Project to supersede SAS No. 59, The Auditor’s Consideration of an Entity’s Ability to Continue as a Going Concern, as amended (AICPA, Professional Standards, AU sec. 341 and AU-C sec. 570).

SAS No. 126 does not change or expand SAS No. 59, as amended, in any significant respect. A summary is available here.

The ASB moved forward with the clarity redraft of SAS No. 59, as amended, so that it is consistent with the format of the other clarified SASs that were recently issued as SAS No. 122, Statements on Auditing Standards: Clarification and Recodification; SAS No. 124, Financial Statements Prepared in Accordance With a Financial Reporting Framework Generally Accepted in Another Country; and SAS No. 125, Alert That Restricts the Use of the Auditor’s Written Communication.

However, the ASB decided to delay convergence with International Standard on Auditing 570, Going Concern, pending FASB’s anticipated development of accounting guidance addressing going concern.

SAS No. 126 is effective for audits of financial statements for periods ending on or after Dec. 15, 2012. SAS No. 126 is available for purchase at the AICPA Store by searching on product number ASASST126P.