The American Institute of CPAs’ Auditing Standards Board has issued a new auditing standard on internal control and an interpretation related to the sustainability financial statements used by the government for long-term projections of social insurance programs.
Statement on Auditing Standards No. 130, An Audit of Internal Control Over Financial Reporting That Is Integrated With an Audit of Financial Statements, establishes requirements and provides guidance that applies only when an auditor is engaged to perform an audit of internal control over financial reporting that is integrated with an audit of financial statements.
SAS 130 takes effect for integrated audits for periods ending on or after Dec. 15, 2016. At that time, according to the AICPA, Statement on Standards for Attestation Engagements No. 15, An Examination of an Entity’s Internal Control Over Financial Reporting That Is Integrated With an Audit of Its Financial Statements, and its related attestation interpretation, “Reporting Under Section 112 of the Federal Deposit Insurance Corporation Improvement Act” (AICPA, Professional Standards, AT sec. 501 and 9501), will be withdrawn, and amendments to various sections in SAS No. 122, Statements on Auditing Standards: Clarification and Recodification, will take effect.
At a later date, the Auditing Standards Board will consider developing an attestation standard addressing examinations of internal control other than internal controls over financial reporting that is integrated with an audit of financial statements.
The interpretation on sustainability financial statements, Interpretation No. 2, “Sustainability Financial Statements Under Federal Financial Accounting Standards—Auditor Reporting,” of AU-C section 700, Forming an Opinion and Reporting on Financial Statements (AICPA, Professional Standards), states that an auditor may report on the basic financial statements, which include the statements of social insurance, changes in social insurance amounts, and long-term fiscal projections, in accordance with Generally Accepted Auditing Standards. The interpretation also provides an illustrative auditor’s report containing an unmodified opinion on the U.S. government-wide financial statements.
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