Proposed NEW SAS & Auditor Reporting

Author: Pat Patterson

Significant Changes to Auditor's Reports for Audits of Non-Issuers
Learn about the new professional standard of Statements on Auditing Standards – Auditor Reporting Financial. This change in the standards represents significant changes in authoritative professional standards concerning audit reporting in the area of forming an opinion and reporting on financial statements. The proposed SAS is intended to converge with ISA 700 (Revised) and, if issued as final, would change the form and content for all auditor’s reports issued for audits of non-issuers.

Consistency with PCAOB Auditor Reporting Model
These changes would be consistent with the changes to the auditor’s report resulting from the IAASB’s new and revised ISAs, and would be consistent with the new PCAOB auditor reporting model with respect to the positioning of the sections “Opinion” and “Basis for Opinion.” The existing requirements relating to forming an opinion on the financial statements, and the form of the opinion, generally would remain unchanged. Included are areas of Communicating Key Audit Matters in the Independent Auditor’s Report, Modifications to the Opinion in the Independent Auditor’s Report, Emphasis-of-Matter Paragraphs and Other-Matter Paragraphs in the Independent Auditor’s Report These subjects are explained and discussed.

Publication Date: September 2018

Designed For
Professionals in public practice, business, industry, government, and education who deal with nonpublic entities and need a course on how to handle the new major auditing issues of auditor reporting.

Topics Covered

• IAASB Auditor Reporting Project
• Converge, Converge, Converge
• PCAOB Auditor Reporting Model
• Disclosures
• Other Projects and Auditor Reporting
• Summary of Significant Changes
• Significant Proposed Amendments to Existing Auditor reporting Standards
• Points to Consider
• Illustrations of Auditor's Reports on Financial Statements
• Illustration 1: An Auditor's Report on Comparative Financial Statements Prepared in Accordance With Accounting Principles Generally Accepted in the United States of America
• Illustration 2: An Auditor's Report on Consolidated Comparative Financial Statements Prepared in Accordance With Accounting Principles Generally Accepted in the United States of America, Including Communication of Key Audit Matters
• Illustration 3: An Auditor's Report on Financial Statements for a Single Year Prepared in Accordance With Accounting Principles Generally Accepted in the United States of America
• Illustration 4: An Auditor's Report on Consolidated Comparative Financial Statements Prepared in Accordance With Accounting Principles Generally Accepted in the United States of America When the Audit Has Been Conducted in Accordance With Both Auditing Standards Generally Accepted in the United States of America and International Standards on Auditing
• Illustration 6: An Auditor's Report on Financial Statements for a Single Year Prepared in Accordance With Accounting Principles Generally Accepted in the United States of America When Comparative Summarized Financial Information Derived From Unaudited Financial Statements for the Prior Year Is Presented
• Illustration 7: An Auditor's Report on Consolidated Comparative Financial Statements Prepared in Accordance With Accounting Principles Generally Accepted in the United States of America When the Audit Has Been Conducted in Accordance With Both Auditing Standards Generally Accepted in the United States of America and the Auditing Standards of the Public Company Accounting Oversight Board

Learning Objectives

• Recognize the background of proposed professional standard change
• Describe Forming an Opinion and Reporting on Financial Statements
• Recognize the new form and content of modifications to the opinion in the Independent Auditor's Report
• Identify Communicating Key Audit Matters in Independent Auditor's Report
• Recognize and review Modifications to the Opinion
• Identify how to review illustrations of New Auditor Reporting
• Identify effective dates, reporting requirements, disclosure requirements, and related matters as deemed appropriate
• Recognize which group was formed to consider the implications of auditor reporting projects on auditor's reports issued for audits of nonissuers
• Differentiate how the new and revised International Standards on Auditing (ISAs) for reporting on audited financial statements affect key audit matters (KAMs)
• Identify how the PCAOB's and IAASB's changes to the auditor's report are different
• Describe the ASB's proposed amendments on disclosures
• Recognize true statements about the proposed amendments to AU‐C section 570 related to going concern
• Identify what is required regarding the addressee in the auditor's report proposed by SAS Forming an Opinion and Reporting on Financial Statements
• Recognize why the AICPA Accounting Standards Board (ASB) propose changes to the auditor reporting model
• Describe reasonable assurance
• Identify the issues SAS No.131 addresses
• Recognize what an auditor should exercise in identifying the risks of material misstatement in the financial statements
• Describe true statements regarding the new and revised International Standards on Auditing (ISAs) related to reporting on audited financial statements
• Identify what would require the auditor to communicate which of the following with those charged with governance under the proposed amendments to AU-C section 260

Level
Intermediate

Instructional Method
Self-Study

NASBA Field of Study
Auditing (2 hours)

Program Prerequisites
General knowledge of generally accepted auditing standards.

Advance Preparation
None