Audit & Attest Standards

    Clarified Statements on Auditing Standards 


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    The Auditing Standards Board (ASB) has redrafted all of the auditing sections in Codification of Statements on Auditing Standards (contained in AICPA Professional Standards). These sections now reflect the ASB’s established clarity drafting conventions designed to make the standards easier to read, understand, and apply.

    Among other improvements, generally accepted auditing standards (GAAS) now more clearly states the objectives of the auditor and the requirements with which the auditor has to comply when conducting an audit in accordance with GAAS.

    As the ASB redrafted the standards for clarity, it also converged the standards with the International Standards on Auditing (ISAs), issued by the International Auditing and Assurance Standards Board (IAASB). Although the purpose of redrafting the auditing standards is for clarity and convergence and not to create additional requirements, auditors will need to make some adjustments to their practices as a result of this project.

    The AICPA has developed a Learning and Implementation Plan to help you prepare for the transition, as well as additional information, including transition guidance and training, located in the Financial Reporting Center.

    As part of the clarification of the SASs, the AU section numbers as designated by SAS Nos. 1–121 were recodified and "AU-C" was selected as an identifier in order to avoid confusion with references to superseded "AU" sections. Superseded “AU” sections were deleted from AICPA Professional Standards in December 2013, by which time substantially all engagements for which the “AU” sections were still effective were expected to be completed. Consult AU-C exhibit A for a list that cross-references AU-C sections to AU sections.

    Clarified Statements on Auditing Standards (SASs) are issued by the Auditing Standards Board. SAS Nos. 122–127 are effective for audits ending on or after December 15, 2012. SAS No. 128 is effective for audits ending on or after December 15, 2014. All clarified SASs will replace pre-clarity SASs in 2014. Until then, both clarified SASs and pre-clarity SASs are available within AICPA Professional Standards. The clarified standards are current as of June 1, 2013.

    Original
    Standard
    No.

    Title & synopsis

    Section in
    Professional
    Standards

    Interpretations (if applicable)

    SAS No. 122

     

    Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance With Generally Accepted Auditing Standards
    This section addresses the independent auditor’s overall responsibilities when conducting an audit of financial statements in accordance with generally accepted auditing standards (GAAS).

    AU-C sec. 200

     

    Terms of Engagement
    This section addresses the auditor’s responsibilities in agreeing upon the terms of the audit engagement with management and, when appropriate, those charged with governance.

    AU-C sec. 210

    Quality Control for an Engagement Conducted in Accordance With Generally Accepted Auditing Standards
    This section addresses the specific responsibilities of the auditor regarding quality control procedures for an audit of financial statements. It also addresses, when applicable, the responsibilities of the engagement quality control reviewer.

    AU-C sec. 220

    Audit Documentation
    This section addresses the auditor’s responsibility to prepare audit documentation for an audit of financial statements.

    AU-C sec. 230

    AU-C sec. 9230

    Consideration of Fraud in a Financial Statement Audit
    This section addresses the auditor’s responsibilities relating to fraud in an audit of financial statements.

    AU-C sec. 240

    Consideration of Laws and Regulations in an Audit of Financial Statements
    This section addresses the auditor’s responsibility to consider laws and regulations in an audit of financial statements.

    AU-C sec. 250

    The Auditor’s Communication With Those Charged With Governance
    This section addresses the auditor’s responsibility to communicate with those charged with governance in an audit of financial statements.

    AU-C sec. 260

    Communicating Internal Control Related Matters Identified in an Audit
    This section addresses the auditor’s responsibility to appropriately communicate to those charged with governance and management deficiencies in internal control that the auditor has identified in an audit of financial statements.

    AU-C sec. 265

    AU-C sec. 9265

    Planning an Audit
    This section addresses the auditor’s responsibility to plan an audit of financial statements.

    AU-C sec. 300

    Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement
    This section addresses the auditor’s responsibility to identify and assess the risks of material misstatement in the financial statements through understanding the entity and its environment, including the entity’s internal control.

    AU-C sec. 315

    Materiality in Planning and Performing an Audit
    This section addresses the auditor’s responsibility to apply the concept of materiality in planning and performing an audit of financial statements.

    AU-C sec. 320

    Performing Audit Procedures in Response to Assessed Risks and Evaluating the Audit Evidence Obtained
    This section addresses the auditor’s responsibility to design and implement responses to the risks of material misstatement identified and assessed by the auditor in accordance with AU-C section 315 and to evaluate the audit evidence obtained in an audit of financial statements.

    AU-C sec. 330

    Audit Considerations Relating to an Entity Using a Service Organization
    This section addresses the user auditor’s responsibility for obtaining sufficient appropriate audit evidence in an audit of the financial statements of a user entity that uses one or more service organizations.

    AU-C sec. 402

    Evaluation of Misstatements Identified During the Audit
    This section addresses the auditor’s responsibility to evaluate the effect of identified misstatements on the audit and the effect of uncorrected misstatements, if any, on the financial statements.

    AU-C sec. 450

    Audit Evidence
    This section explains what constitutes audit evidence in an audit of financial statements and addresses the auditor’s responsibility to design and perform audit procedures to obtain sufficient appropriate audit evidence to be able to draw reasonable conclusions on which to base the auditor’s opinion.

    AU-C sec. 500

    AU-C sec. 9500

    Audit Evidence—Specific Considerations for Selected Items
    This section addresses specific considerations by the auditor in obtaining sufficient appropriate audit evidence, in accordance with AU-C section 330 and 500 regarding certain aspects of (a) investments in securities and derivative instruments; (b) inventory; (c) litigation, claims, and assessments involving the entity; and (d) segment information in an audit of financial statements.

    AU-C sec. 501

    External Confirmations
    This section addresses the auditor’s use of external confirmation procedures to obtain audit evidence, in accordance with the requirements of AU-C sections 330 and 500. It does not address inquiries regarding litigation, claims, and assessments

    AU-C sec. 505

    Opening Balances—Initial Audit Engagements, Including Reaudit Engagements
    This section addresses the auditor’s responsibilities relating to opening balances in an initial audit engagement, including a reaudit engagement. In addition to financial statement amounts, opening balances include matters requiring disclosure that existed at the beginning of the period, such as contingencies and commitments.

    AU-C sec. 510

    Analytical Procedures
    This section addresses the auditor’s use of analytical procedures as substantive procedures (substantive analytical procedures). It also addresses the auditor’s responsibility to perform analytical procedures near the end of the audit that assist the auditor when forming an overall conclusion on the financial statements.

    AU-C sec. 520

    Audit Sampling
    This section applies when the auditor has decided to use audit sampling in performing audit procedures. It addresses the auditor’s use of statistical and nonstatistical sampling when designing and selecting the audit sample, performing tests of controls and tests of details, and evaluating the results from the sample.

    AU-C sec. 530

    Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures
    This section addresses the auditor’s responsibilities relating to accounting estimates, including fair value accounting estimates and related disclosures, in an audit of financial statements.

    AU-C sec. 540

    Related Parties
    This section addresses the auditor’s responsibilities relating to related party relationships and transactions in an audit of financial statements.

    AU-C sec. 550

    Subsequent Events and Subsequently Discovered Facts
    This section addresses the auditor’s responsibilities relating to subsequent events and subsequently discovered facts in an audit of financial statements. It also addresses a predecessor auditor’s responsibilities for subsequent events and subsequently discovered facts when reissuing the auditor’s report on previously issued financial statements that are to be presented on a comparative basis with audited financial statements of a subsequent period.

    AU-C sec. 560

    Written Representations
    This section addresses the auditor’s responsibility to obtain written representations from management and, when appropriate, those charged with governance in an audit of financial statements.

    AU-C sec. 580

    Consideration of Omitted Procedures After the Report Release Date
    This section addresses the auditor’s responsibilities when, subsequent to the report release date, the auditor becomes aware that one or more auditing procedures that the auditor considered necessary in the circumstances existing at the time of the audit were omitted from the audit of the financial statements.

    AU-C sec. 585

    Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors)
    This section addresses special considerations that apply to group audits, in particular those that involve component auditors.

    AU-C sec. 600

    Using the Work of an Auditor’s Specialist
    This section addresses the auditor’s responsibilities relating to the work of an individual or organization possessing expertise in a field other than accounting or auditing when that work is used to assist the auditor in obtaining sufficient appropriate audit evidence.

    AU-C sec. 620

    AU-C sec. 9620

    Forming an Opinion and Reporting on Financial Statements
    This section addresses the auditor’s responsibility to form an opinion on the financial statements. It also addresses the form and content of the auditor’s report issued as a result of an audit of financial statements.

    AU-C sec. 700

    AU-C sec. 9700

    Modifications to the Opinion in the Independent Auditor’s Report
    This section addresses the auditor’s responsibility to issue an appropriate report in circumstances when, in forming an opinion in accordance with AU-C section 700, the auditor concludes that a modification to the auditor’s opinion on the financial statements is necessary.

    AU-C sec. 705

    Emphasis-of-Matter Paragraphs and Other-Matter Paragraphs in the Independent Auditor’s Report
    This section addresses additional communications in the auditor’s report when the auditor considers it necessary to draw users’ attention to a matter or matters presented or disclosed in the financial statements that are of such importance that they are fundamental to users’ understanding of the financial statements (emphasis-of-matter paragraph) or draw users’ attention to any matter or matters other than those presented or disclosed in the financial statements that are relevant to users’ understanding of the audit, the auditor’s responsibilities, or the auditor’s report (other-matter paragraph).

    AU-C sec. 706

    Consistency of Financial Statements
    This section addresses the auditor’s evaluation of the consistency of the financial statements between periods, including changes to previously issued financial statements and the effect of that evaluation on the auditor’s report on the financial statements.

    AU-C sec. 708

    Other Information in Documents Containing Audited Financial Statements
    This section addresses the auditor’s responsibility with respect to other information in documents containing audited financial statements and the auditor’s report thereon. In the absence of any separate requirement in the particular circumstances of the engagement, the auditor’s opinion on the financial statements does not cover other information, and the auditor has no responsibility for determining whether such information is properly stated. This section establishes the requirement for the auditor to read the other information of which the auditor is aware because the credibility of the audited financial statements may be undermined by material inconsistencies between the audited financial statements and other information.

    AU-C sec. 720

    Supplementary Information in Relation to the Financial Statements as a Whole
    This section addresses the auditor’s responsibility when engaged to report on whether supplementary information is fairly stated, in all material respects, in relation to the financial statements as a whole.

    AU-C sec. 725

    AU-C sec. 9725

    Required Supplementary Information
    This section addresses the auditor’s responsibility with respect to information that a designated accounting standards setter requires to accompany an entity’s basic financial statements (hereinafter referred to as required supplementary information).

    AU-C sec. 730

    Special Considerations—Audits of Financial Statements Prepared in Accordance With Special Purpose Frameworks
    This section addresses special considerations in the application of AU-C sections 200-700 to an audit of financial statements prepared in accordance with a special purpose framework, which is a cash, tax, regulatory, or contractual basis of accounting.

    AU-C sec. 800

    Special Considerations—Audits of Single Financial Statements and Specific Elements, Accounts, or Items of a Financial Statement
    This section addresses special considerations in the application of AU-C sections 200-700 to an audit of a single financial statement or of a specific element, account, or item of a financial statement.

    AU-C sec. 805

    Reporting on Compliance With Aspects of Contractual Agreements or Regulatory Requirements in Connection With Audited Financial Statements
    This section addresses the auditor’s responsibility when the auditor is requested to report on an entity’s compliance with aspects of contractual agreements or regulatory requirements, insofar as they relate to accounting matters, in connection with an audit of financial statements (referred to hereinafter as a report on compliance).

    AU-C sec. 806

    Engagements to Report on Summary Financial Statements
    This section addresses the auditor’s responsibilities relating to an engagement to report separately on summary financial statements derived from financial statements audited in accordance with generally accepted auditing standards (GAAS) by the same auditor.

    AU-C sec. 810

    Reports on Application of Requirements of an Applicable Financial Reporting Framework
    This section addresses the reporting accountant’s responsibilities when requested to issue a written report on the application of the requirements of an applicable financial reporting framework to a specific transaction or the type of report that may be issued on a specific entity’s financial statements.

    AU-C sec. 915

    Letters for Underwriters and Certain Other Requesting Parties
    This section addresses the auditor’s responsibilities when engaged to issue letters (commonly referred to as comfort letters) to requesting parties in connection with a nonissuer entity’s financial statements included in registration statements filed with the Securities and Exchange Commission (SEC) under the Securities Act of 1933 (the 1933 Act) (for example, inclusion of the nonissuer entity’s financial statements as required by either Rule 3-05 or 3-09 of Regulation S-X) or included in other securities offerings.

    AU-C sec. 920

    Filings With the U.S. Securities and Exchange Commission Under the Securities Act of 1933
    This section addresses the auditor’s responsibilities in connection with financial statements of a nonissuer included or incorporated by reference in a registration statement filed with the U.S. Securities and Exchange Commission (SEC) under the Securities Act of 1933, as amended.

    AU-C sec. 925

    Interim Financial Information
    This section addresses the auditor’s responsibilities when engaged to review interim financial information under the conditions specified in this section.

    AU-C sec. 930

    Compliance Audits
    This section addresses the application of GAAS to a compliance audit. Compliance audits usually are performed in conjunction with a financial statement audit. This section does not apply to the financial statement audit component of such engagements.

    AU-C sec. 935

    SAS No. 123

    Omnibus Statement on Auditing Standards—2011
    This standard contains amendments that conform SAS Nos. 117–118 to SAS No. 122 and address other changes necessitated by the Clarity Project.

    AU-C sec. 200.03

    AU-C sec. 200.15

    AU-C sec. 200.A17

    AU-C sec. 230.19

    AU-C sec. 260.12

    AU-C sec. 260.A27

    AU-C sec. 705.16

    AU-C sec. 705.A19

    AU-C sec. 720.10–.11

    AU-C sec. 720.A4

    AU-C sec. 915.09

    AU-C sec. 915.14

    AU-C sec. 935.30–.31

    AU-C sec. 935.A41

     

    SAS No. 124

    Financial Statements Prepared in Accordance With a Financial Reporting Framework Generally Accepted in Another Country
    This section requires the auditor to include an emphasis-of-matter paragraph to highlight a foreign financial reporting framework in instances where a report that is to be used in the United States was prepared in accordance with a financial reporting framework generally accepted in another country, but also permits the auditor to express an unqualified opinion.

    AU-C sec. 910

     

    SAS No. 125

     

    Alert That Restricts the Use of the Auditor's Written Communication
    This section addresses the auditor’s responsibility—when required or when the auditor decides—to include in the auditor’s report or other written communication issued by the auditor in connection with an engagement conducted with GAAS, language that restricts the use of the auditor’s written communication.

    AU-C sec. 905

     

    SAS No. 126

    The Auditor's Consideration of an Entity's Ability to Continue as a Going Concern (Redrafted)
    This section addresses the auditor’s responsibilities in an audit of financial statements with respect to evaluating whether there is substantial doubt about the entity’s ability to continue as a going concern.

    AU-C sec. 570


    SAS No. 127

     

    Omnibus Statement on Auditing Standards—2013
    This section addresses making reference to the audit of a component auditor in the auditor’s report on group financial statements. It also adds an other basis of accounting to the bases of accounting defined as special purpose frameworks.

    AU-C sec. 600.25

    AU-C sec. 800

     

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