The AICPA’s Auditing Standards Board (ASB) has voted to issue a new auditing standard, Statement on Auditing Standards Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA.
The Statement of Auditing Standards (SAS) 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. The ASB expects to consider whether conforming amendments to this SAS will be necessary once the Proposed Statements on Auditing Standards Auditor Reporting and Related Amendments are voted to be issued, which is expected to occur in the first half of 2019.
The SAS includes new requirements for engagement acceptance, audit risk assessment and response, communications with those charged with governance, procedures for an ERISA section 103(a)(3)(C) audit, and considerations relating to the Form 5500. It also contains a new report format for ERISA section 103(a)(3)(C) audits. For audits of ERISA plan financial statements only, this SAS would apply in place of AU-C section 700, Forming an Opinion and Reporting on Financial Statements, and paragraph .09 of AU-C section 725, Supplementary Information in Relation to the Financial Statements as a Whole (AICPA, Professional Standards). The SAS also would amend various other AU-C sections in AICPA Professional Standards.
When issued, it is expected to be effective no earlier than for audits of financial statements for periods ending on or after December 15, 2020.