CPA

AICPA Releases New SAS on Auditor Reporting

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Statement on Auditing Standards (SAS) No. 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements, was recently released by the AICPA’s Auditing Standards Board. The overall objective is to update the form and content of the auditor’s reports of non-issuers to be more consistent with recent updates to both PCAOB and international audit standards.

Notably, the auditor’s opinion was moved to the front of the report for enhanced visibility. A “Basis for Opinion” section will immediately follow, which will enhance transparency into the auditor’s responsibilities. The following are key elements of this section:

  • State that the audit was conducted in accordance with generally accepted auditing standards (GAAS)and identify the United States as the country of origin.
  • Reference the auditor’s responsibilities.
  • State that the auditor is required to be independent and meet other ethical requirements.
  • Indicate whether the auditor believes evidence obtained is sufficient and appropriate as a basis for the opinion.

Illustrative reporting language related to substantial doubt about an entity’s ability to continue as a going concern was enhanced. As a result, the standard language was modified to explicitly assign accountability for going concern evaluation to the entity’s management, while the auditor’s responsibilities were clarified to include judgments related to going concern uncertainty.

Other related sections of the SASs were modified as necessary, such as example audit engagement letter language.

One aspect of public entity reporting, communication of key or critical audit matters, is not required by the new SAS. However, auditors may be engaged to include such matters in the report. Therefore, the new SAS provides guidance related to identifying and reporting key audit matters, when relevant to the engagement.

SAS No. 134 is effective for audits of periods ending on or after December 15, 2020. Early implementation is not permitted.

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About the author

Jennifer has more than 25 years of experience in designing high-quality training programs in a variety of technical and “soft-skills” topics necessary for professional and organizational success. In 2003, she founded Emergent Solutions Group, LLC, where she focuses on designing and delivering practical and engaging accounting and auditing training. Jennifer started her career in audit for Deloitte & Touche. She graduated summa cum laude from Marymount University with a B.B.A. in Accounting.EducationMarymount University: Bachelor's of Business Administration, AccountingOrganizationsNorth Carolina Association of CPAsAICPAPublicationsAccounting for Cryptocurrency and Digital AssetsAccounting for Convertible DebtCoursesAuditing ContingenciesAccounting and Reporting for Contributions, Including Gifts in KindThe Future of ESG Reporting

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