ASB proposes to supersede going concern auditing standard

The AICPA Auditing Standards Board has proposed to supersede its auditing standard on going concern.

An exposure draft issued Tuesday, Proposed Statement on Auditing Standards (SAS), The Auditor’s Consideration of an Entity’s Ability to Continue as a Going Concern, would supersede SAS No. 126 of the same title and amend various sections of SAS No. 122, Statements on Auditing Standards: Clarification and Recodification, as amended.

The ASB is pursuing a strategy to converge its standards with those of the International Auditing and Assurance Standards Board (IAASB) and used International Standard on Auditing (ISA) 570 (Revised), Going Concern, as the base for the going concern proposal.

The proposed SAS does not reflect any revisions to ISA 570 (Revised) related to the convergence with the IAASB’s auditor reporting standards. Those revisions will be considered during the ASB’s overall project on the auditor’s report.

The exposure draft includes proposed amendments to auditing standards addressing:

• Audits of special-purpose frameworks and audits of single financial statements and specific elements, accounts, or items of a financial statement.
• Interim financial information.

The proposal is intended to be applicable in audits of financial statements prepared under different financial accounting frameworks and therefore was written in a neutral accounting framework manner.

The proposed SAS would be effective for audits of financial statements for periods ending on or after Dec. 15, 2017, and for interim periods beginning thereafter.

Comments should be addressed to Sherry Hazel at shazel@aicpa.org by Sept. 5.

—Ken Tysiac (ktysiac@aicpa.org) is a JofA editorial director.