AICPA’s Auditing Standards Board Issues Suite of Standards on Auditor Reporting

The American Institute of CPAs (AICPA) Auditing Standards Board (ASB) has issued SAS No. 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements.

This suite of auditor reporting standards includes a new AU-C section 701, Communicating Key Audit Matters in the Independent Auditor’s Report, and replaces the following AU-C sections in AICPA Professional Standards:

Section 700, Forming an Opinion and Reporting on Financial Statements
Section 705, Modifications to the Opinion in the Independent Auditor’s Report
Section 706, Emphasis-of-Matter Paragraphs and Other-Matter Paragraphs in the Independent Auditor’s Report

“The Auditor Reporting suite of standards will benefit users of audited financial statements throughout the U.S. by placing the auditor’s opinion at the front of the report for added visibility and providing necessary transparency into the basis for the auditor’s opinion and the responsibilities of both entity management and auditors,” said Robert Dohrer, CPA, CGMA, AICPA Chief Auditor.

SAS No. 134, which also amends various other AU-C sections, addresses the auditor’s responsibility to form an opinion on the financial statements and the form and content of the auditor’s report issued as a result of an audit of financial statements. It also addresses the auditor’s responsibilities, and the form and content of the auditor’s report, when the auditor concludes that a modification to the auditor’s opinion on the financial statements is necessary, and when additional communications are necessary in the auditor’s report.

The SAS becomes effective for audits of financial statements for periods ending on or after December 15, 2020. Early implementation is not permitted.

Omnibus SAS

The ASB has also issued SAS No. 135, Omnibus Statement on Auditing Standards—2019, that is intended to more closely align ASB guidance with the PCAOB’s standards by primarily amending AU-C section 260, Communications With Those Charged With Governance, AU-C section 550, Related Parties, and AU-C section 240, Consideration of Fraud in a Financial Statement Audit, in AICPA Professional Standards.

The SAS becomes effective for audits of financial statements for periods ending on or after December 15, 2020.

The AICPA will offer free and member-benefit resources along with a series of webcasts on the new auditing standards, a complete schedule can be found here.