NEW YORK (July 10, 2019) - The American Institute of CPA’s (AICPA) Auditing Standards Board (ASB) has issued Statement on Auditing Standards 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).
“In the ASB’s continued efforts to improve the transparency of auditor reporting in general, this new SAS specifically addresses the significant public interest associated with audits of employee benefit plans subject to ERISA and was undertaken in consultation with the US Department of Labor,” said Robert Dohrer, CPA, CGMA, AICPA Chief Auditor.
SAS No. 136 is the result of an effort to enhance the communicative value and transparency of the auditor’s report for ERISA plan financial statements, and to include performance requirements specific to auditing ERISA plans relating to engagement acceptance, audit risk assessment and response relating to plan provisions, communication of reportable findings to those charged with governance, and responsibilities relating to the ERISA-required supplemental schedules, to name a few.
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.
The ASB also issued Statement on Auditing Standards (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).
“SAS No. 137 is another piece of the Auditing Standards Board’s efforts in the public interest to enhance transparency in reporting related to the auditor’s responsibilities for non-financial statement information included in annual reports,” said Dohrer.
SAS No. 137 will benefit users of audited financial statements by providing transparency and it is expected to reduce diversity in practice with respect to information and documents 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.
The AICPA will offer free member information and resources on the new standards, here.