SAS 142 - Implementing the new audit evidence standard
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SAS 142 - Implementing the new audit evidence standard

Jul 13, 2022 · 205.1 KB Download

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Statement on Auditing Standards (SAS) 142, Audit Evidence, modernizes the audit evidence standard codified in AU-C 500, Audit Evidence. Like the legacy standard, SAS 142 consists of few actual “requirement” paragraphs. The modernization of the standard is accomplished through application guidance and examples, which have been expanded and amended. A big driver behind the development of SAS 142 was the fast pace of technological advancement. When the legacy audit evidence standard was issued, audit evidence principally was obtained from internally generated sources of the client entity; and it consisted mostly of paper, hard-copy documents. Obviously, business processes have rapidly and substantially evolved since that time. Today’s business environment is characterized by pervasive use of IT, increased availability of large amounts of data, and increased use of IT-based data analytic tools. In addition, automated tools, data analytic techniques, and AI are increasingly available to auditors, as are new sources of information, such as the internet and social media.

SAS 142 was deliberately developed as a principles-based standard. Auditors have flexibility to use professional judgment to innovate within those principles to achieve the objectives of the audit. Auditors will need to assess how SAS 142 impacts methodology and internal guidance. The SAS is effective for audits of financial statements for periods ending on or after December 15, 2022. In this report, we highlight the more significant aspects of SAS 142.

Download the CPEA report: SAS 142 - Implementing the new audit evidence standard

File name: cpea-july-2022-report-sas-142-implementing-the-new-audit-evidence-standard.pdf

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