Statements on Auditing Standards



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This Statement on Auditing Standards (SAS) changes generally accepted auditing standards by 1. Prescribing a new form for the auditor's standard report. Most significant among the changes from the previous standard report is (a) the addition of an introductory paragraph that differentiates management's responsibilities for the financial statements from the auditor's role in expressing an opinion on them based upon his audit, (b) an explicit acknowledgment that an audit provides reasonable assurance within the context of materiality, and (c) the addition of a brief explanation of what an audit entails. 2. Revising the second standard of reporting to require a reference to consistency in the auditor's report (through the addition of an explanatory paragraph following the opinion paragraph) only when accounting principles have not been consistently applied. 3. Changing the manner of reporting on a material uncertainty to eliminate the "subject to" opinion qualification while retaining the requirement to discuss the matter (through the addition of an explanatory paragraph following the opinion paragraph). This SAS also expands the guidance for addressing and evaluating uncertainties.


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Auditing -- Standards -- United States; Audited financial statements -- Standards -- United States; Financial statements -- Auditing -- Standards; Auditors' reports -- Standards -- United States


Accounting | Taxation


Copyright and permission to reprint held by: American Institute of Certified Public Accountants

Reports on audited financial statements



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