Statements of Position

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Description

In response to a request from the Securities and Exchange Commission (SEC), the Auditing Standards Board (ASB) agreed to reconsider the guidance in SAS No. 50 with respect to the provision permitting an accountant to issue a written report to intermediaries on the application of accounting principles not involving facts or circumstances of a specific entity ("hypothetical transactions"). The SEC has expressed concerns regarding the appropriate use of these reports and whether such reports are in the best interest of the public. Due to the nature of a hypothetical transaction, there is no way for a reporting accountant to know, for example, whether the continuing accountant of a specific entity with the transaction has reached a different conclusion on the application of accounting principles for the same or a similar transaction, or how the specific entity has accounted for similar transactions in the past. As a result of its deliberations, the ASB believes that a revision to SAS No. 50 to prohibit an accountant from providing a written report on a hypothetical transaction would be appropriate. This proposed amendment would prohibit an accountant from providing a written report on the application of accounting principles not involving facts and circumstances of a specific entity. This proposed Statement amends SAS No. 50, Reports on the Application of Accounting Principles (AICPA, Professional Standards, vol. 1, AU sec. 625).

ISBN

ed02-04-30

Publication Date

2002

Relational Format

Book

Keywords

Auditing -- Standards -- United States; Accounting -- Standards -- United States

Disciplines

Accounting | Taxation

Comments

Originally published by: American Institute of Certified Public Accountants; Copyright and permission to reprint held by: American Institute of Certified Public Accountants; Exposure draft (American Institute of Certified Public Accountants), 2002, April 30

Proposed statement on auditing standards : Amendment to Statement on auditing standards no. 50, Reports on the application of accounting principles;Amendment to Statement on auditing standards no. 50, Reports on the application of accounting principles  Reports on the application of accounting principles

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