Audit and Attest

ASB Issues SAS No. 145
The ASB has issued SAS No. 145, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement, to supersede SAS No. 122, as amended, section 315 of the same title, and amend various AU-C sections in AICPA Professional Standards. Click here to register for an upcoming webcast about this standard.

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ASB Issues SAS No. 144
The ASB has issued SAS No. 144, Amendments to AU-C Sections 501, 540, and 620 Related to the Use of Specialists and the Use of Pricing Information Obtained From External Information Sources, to amend SAS No. 122, as amended, sections 501, Audit Evidence — Specific Considerations for Selected Items,  and 620, Using the Work of an Auditor’s Specialist, and SAS No. 143, Auditing Accounting Estimates and Related Disclosures, to provide guidance on the use of information from pricing services as audit evidence and enhance guidance on the use of specialists.

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ASB Issues SSAE No. 22
The ASB has issued SSAE No. 22 , Review Engagements, to supersede SSAE No. 18, Attestation Standards: Clarification and Recodification, as amended, section 210 of the same title. Among other things, SSAE No. 22 describes the types of procedures a practitioner may perform in a review engagement, requires that the practitioner’s report include an informative summary of the work performed as a basis for the practitioner’s conclusion, and permits the expression of an adverse conclusion. The SSAE becomes effective for practitioners’ review reports dated on or after June 15, 2022. Early implementation is permitted only if the practitioner also early implements the amendments to AT-C section 105, Concepts Common to All Attestation Engagements, included in SSAE No. 21, Direct Examination Engagements.

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ASB Issues SSAE No. 21
The ASB has issued SSAE No. 21, Direct Examination Engagements, to add new AT-C section 206 of the same title in AICPA Professional Standards. The SSAE amends AT-C section 105, Concepts Common to All Attestation Engagements, principally for new terminology, and supersedes and renames AT-C section 205 to Assertion-Based Examination Engagements. The SSAE supersedes AT-C section 205 to differentiate it from AT-C section 206, although both types of examination engagements are reasonable assurance engagements. SSAE No. 21 becomes effective for practitioner’s reports dated on or after June 15, 2022. Early implementation is permitted.

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ASB Issues SAS No. 143
The ASB has issued SAS No. 143, Auditing Accounting Estimates and Related Disclosures, to supersede SAS No. 122, as amended, section 540, Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures, and amend various other AU-C sections in AICPA Professional Standards. This SAS is one piece of a larger project to enhance audit quality (see the AICPA’s Enhancing Audit Quality Initiative) and is intended to enable auditors to appropriately address the increasingly complex scenarios that arise today from new accounting standards that include estimates and related disclosures, and to enhance the auditor’s focus on factors driving estimation uncertainty and potential management bias.

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ASB Issues SAS No. 142
The ASB has issued SAS No. 142, Audit Evidence, to supersede SAS No. 122, as amended, section 500 of the same title and amend various other AU-C sections in AICPA Professional Standards. The 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, 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.

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Pre-SAS No. 134 Codification of GAAS Now Available 
To assist auditors and firms that do not implement SAS Nos. 134–140 prior to December 15, 2021, a “Pre-SAS No. 134” edition of the auditing standards (the AU-C sections) in AICPA Professional Standards is now available. This edition contains SAS Nos. 122–133, as amended, and remains effective through 2021 and should be followed when SAS Nos. 134–140 have not been implemented. Each AU-C section in this edition is designated with a “B” suffix (for example, “AU-C section 200B”) to denote content that does not reflect the codification of SAS Nos. 134–140 or the amendments to other SASs made by SAS Nos. 134–140. Upon implementation of SAS Nos. 134–140, auditors and firms should no longer utilize this edition.

ASB Issues SAS No. 141 to Delay SAS Nos. 134 – 140 Effective Dates, Permit Early Implementation 
The ASB has issued SAS No. 141, Amendment to the Effective Dates of SAS Nos. 134–140, to 1) delay by one year the effective dates of SAS Nos. 134–140 (which, among other things, substantially changes the auditor’s report) from December 15, 2020, to December 15, 2021, and 2) and also permits early implementation of this suite of standards. SAS No. 141 becomes effective upon issuance.

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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.

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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.

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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.

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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, Illustrative auditor’s reports for initial year of implementation of SAS No. 136, and Frequently Asked Questions.

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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.