AICPA releases set of auditor reporting standards

The American Institute of CPAs’ Auditing Standards Board has posted a group of standards for audit reports and auditing financial statements.

Statement on Auditing Standards No. 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements, includes a new section on Communicating Key Audit Matters in the Independent Auditor’s Report, replacing three earlier sections in the AICPA’s 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.

SAS No. 134 also amends several other sections in the previous standards, plus it addresses the auditor’s responsibility to form an opinion on the financial statements along with the form and content of the auditor’s report. The statement discusses what happens when an auditor determines that a modification to an earlier opinion on the financial statements is necessary, and when more communications are necessary in the auditor’s report.

The SAS takes effect for audits of financial statements for periods ending on or after Dec. 15, 2020. Early implementation isn’t allowed.

“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 AICPA chief auditor Robert Dohrer in a statement Wednesday, May 8.

The AICPA’s Auditing Standards Board also released another Statement on Auditing Standards, SAS No. 135, Omnibus Statement on Auditing Standards—2019. It aims to more closely align the AICPA Auditing Standards Board’s guidance with the Public Company Accounting Oversight Board’s standards by 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.

Like SAS No. 134, SAS nO. 135 also takes effect for audits of financial statements for periods ending on or after Dec. 15, 2020.

The AICPA plans to provide free and member-benefit resources, plus a series of webcasts, on the new auditing standards. A schedule can be found here.