Audit and Attest

ASB Issues SAS No. 140
The ASB has issued SAS No. 140, Amendments to AU-C Sections 725, 730, 930, 935, and 940 to Incorporate Auditor Reporting Changes From SAS Nos. 134 and 137, to complete its yearlong effort to conform GAAS with the reporting provisions of SAS No. 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements, and other recently issued SASs. In addition, certain other AU-C sections in AICPA Professional Standards have been amended to reflect practice issues that have arisen since the most recent revisions to these AU-C sections, and AU-C section 935, Compliance Audits, has also been amended to be consistent with current governmental requirements.

Visit our hub site, Recently Issued Auditing and Attestation Standards: Information and Resources, for the latest information on this standard.

ASB Issues SAS No. 139
The ASB has issued SAS No. 139, Amendments to AU-C Sections 800, 805, and 810 to Incorporate Auditor Reporting Changes From SAS No. 134, to align AU-C sections 800, Special Considerations—Audits of Financial Statements Prepared in Accordance With Special Purpose Frameworks, 805, Special Considerations—Audits of Single Financial Statements and Specific Elements, Accounts, or Items of a Financial Statement, and 810, Engagements to Report on Summary Financial Statements, in AICPA Professional Standards with the reporting provisions of SAS No. 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements, and other recently issued SASs.

Visit our hub site, Recently Issued Auditing and Attestation Standards: Information and Resources, for the latest information on this standard.

ASB Issues SAS No. 138 and SSAE No. 20
The ASB has issued SAS No. 138, Amendments to the Description of the Concept of Materiality, and SSAE No. 20 of the same title to amend various AU-C and AT-C sections, respectively, in AICPA Professional Standards. These standards impact the CPA’s reports because the new reports include a description of when misstatements are considered material. These standards make the description of materiality consistent across the Unites States and the changes are not expected to significantly affect practice in the United States.

Visit our hub site, Recently Issued Auditing and Attestation Standards: Information and Resources, for the latest information on this standard.

ASB Issues SSAE No. 19
The ASB has issued SSAE No. 19, Agreed-Upon Procedures Engagements, to supersede SSAE No. 18, Attestation Standards: Clarification and Recodification, AT-C section 215 of the same title in AICPA Professional Standards. In today’s increasingly complex business environment, the need for services provided by practitioners related to rapidly evolving subject matters is apparent. By permitting the practitioner to assist in developing procedures, not requiring an assertion by a responsible party and permitting general-use reports, the agreed-upon procedures services provided by the profession will see enhanced value and relevance to users of these reports.

Visit our hub site, Recently Issued Auditing and Attestation Standards: Information and Resources, for the latest information on this standard.

ASB Issues SAS No. 137
The ASB has issued SAS No. 137, The Auditor’s Responsibilities Relating to Other Information Included in Annual Reports, to supersede SAS No. 118, Other Information in Documents Containing Audited Financial Statements, as amended (AICPA, Professional Standards, AU-C sec. 720). The ASB believes that SAS No. 137 will benefit users of audited financial statements by providing transparency related to the auditor’s responsibility for other information when the auditor has obtained all of the other information at the date of the auditor’s report on the financial statements. SAS No. 137 is expected to also reduce diversity in practice with respect to information and documents that are considered to be within the scope of this SAS. This SAS becomes effective for audits of financial statements for periods ending on or after December 15, 2020. Early implementation is not permitted.

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ASB Issues SAS No. 136
The ASB has issued SAS No. 136, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA. This SAS creates a new AU-C section 703 in AICPA Professional Standards and addresses the auditor’s responsibility to form an opinion and report on the audit of financial statements of employee benefit plans subject to the Employee Retirement Income Security Act of 1974 (ERISA), and the form and content of the auditor’s report issued as a result of an audit of ERISA plan financial statements.

In an effort to enhance the communicative value and transparency of the auditor’s report, this SAS reflects a new reporting model for audits of ERISA plans that, among other things, changes the form and content of the auditor’s report when management elects to exclude from the audit certain investment information held and certified by a qualified institution, as permitted by ERISA. This SAS also includes incremental performance requirements to effect certain of the new reporting requirements in addition to those currently set forth in the existing AU-C sections in AICPA Professional Standards.

The SAS is effective for audits of ERISA plan financial statements for periods ending on or after December 15, 2020. Early implementation is not permitted. New resources are now available including an “At a Glance” document and Frequently Asked Questions.

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ASB Proposes New Audit Evidence Standard
The ASB has issued an exposure draft of a Proposed SAS, Audit Evidence, to supersede SAS No. 122, Statements on Auditing Standards: Clarification and Recodification, as amended, section 500, Audit Evidence, and amend various other AU-C sections in AICPA Professional Standards. The proposed SAS addresses the evolving nature of business and audit services and issues that have arisen since extant AU-C section 500 was originally issued. The issues arising include the use of emerging technologies by both preparers and auditors (for example, audit data analytics and use of blockchain), the application of professional skepticism, the expanding sources of information to be used as audit evidence, and more broadly, the accuracy, completeness, relevance and reliability of audit evidence. A key proposal is to expand the focus of the proposed SAS, including its objective, to be primarily focused on considering the attributes and factors of information that contribute to an assessment of whether sufficient appropriate audit evidence has been obtained. Extant AU-C section 500 focuses on audit procedures performed as a basis for assessing the sufficiency and appropriateness of audit evidence. The change in focus is proposed to be accomplished by establishing a multi-dimensional consideration of attributes and factors in evaluating such audit evidence. Comments are due September 18.

ASB Issues SAS Nos. 134 and 135
The ASB issued SAS No. 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements and SAS No. 135, Omnibus Statement on Auditing Standards—2019, in May 2019.  Visit our hub site, Recently Issued Auditing and Attestation Standards: Information and Resources, for the latest information on this standard.

Helping Management of a Service Organization Prepare for a SOC 1® Engagement
The Service Organizations Task Force of the Auditing Standards Board has developed a publication intended for management of a service organization that is undergoing, or planning on undergoing a SOC 1^® engagement. These engagements are performed under AT-C section 320, Reporting on an Examination of Controls at a Service Organization Relevant to User Entities’ Internal Control Over Financial Reporting, The publication, entitled Information for Management of a Service Organization in a SOC 1^® Engagement, contains illustrations and answers to frequently asked questions that will help management of a service organization prepare for and facilitate the SOC 1^® engagement. The members of the Service Organizations Task Force are CPAs who specialize in performing SOC engagements, and the publication reflects their expertise and experience in performing these engagements.

Standards Tracker

In an effort to keep its members informed, the AICPA has created a Standards Tracker. This tool will keep members up to date regarding the most recent guidance made available by standard setters, filtered in order to give you only what you need to know.