AICPA proposes changes to auditor reporting standards

The American Institute of CPAs’ Auditing Standards Board has proposed amendments to three sets of auditing standards for special-purpose, single and summary financial statements.

For the exposure draft of the proposed Statement on Auditing Standards Amendments to AU-C Sections 800, 805, and 810 to Incorporate Auditor Reporting Changes from SAS No. 134, the board wants to conform Generally Accepted Auditing Standards to new auditor reporting standards.

The proposed standard aligns:

• AU-C sections 800, Special Considerations—Audits of Financial Statements Prepared in Accordance With Special PurposeFrameworks, which addresses audits of financial statements prepared in accordance with a special purpose framework (such as a framework other than GAAP) like the cash basis of accounting or the tax basis of accounting;

• 805, Special Considerations—Audits of Single Financial Statements and Specific Elements, Accounts, or Items of a FinancialStatement, which deals with audits of a single financial statement, a balance sheet, or an element of a financial statement; and

• 810, Engagements to Report on Summary Financial Statements (the AU-C 800 series, which addresses audits of summary financial statements derived from financial statements audited in accordance with GAAS.

Separately, the Public Company Accounting Oversight Board and the International Auditing and Assurance Standards Board have revised their own auditor reporting standards to respectively require disclosure of any "critical audit matters" and "key audit matters" encountered during the course of an audit.

“As we continue to enhance the transparency of auditor reporting, we have extended the provisions of SAS No. 134 as they relate to providing insight into the basis for the auditor’s opinion,” said AICPA chief auditor Robert Dohrer in a statement. “Disclosure of the responsibilities of both entity management and auditors in these unique reporting circumstances is also important.”

The proposed standards will be combined 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 standards. In May, the AICPA Auditing Standards Board issued SAS No. 134 that updates the form and content of auditors’ reports on the financial statements of non-issuers.

The AICPA is asking for feedback on the exposure draft by Oct. 28. Comments can be sent to Sharon Macey at Sharon.Macey@aicpa-cima.com.