Statements of Position



Download Full Text (205 KB)


This exposure draft introduces a proposed Statement on Auditing Standards (SAS) that will replace SAS No. 96, Audit Documentation (AICPA, Professional Standards, vol. 1, AU sec. 339). This proposed SAS establishes standards and provides guidance to an auditor on audit documentation for audits of financial statements or other financial information being reported on. Issues surrounding audit documentation continue to be discussed due to events affecting the profession that post-date the development and issuance of SAS No. 96. Specifically, some state regulators and government auditors seek more uniformity in the preparation, filing, and retention of audit documentation of nonissuers. Audit documentation is an essential element of audit quality. Although audit documentation alone does not guarantee audit quality, the process of preparing sufficient and competent audit documentation contributes to the quality of an audit. The Auditing Standards Board (ASB) believes this exposure draft is responsive to the issues that have been raised in the U.S. nonissuer community and will improve audit practice and serve the public interest. In developing this exposure draft, the ASB considered the documentation requirements of the Public Company Accounting Oversight Board's Auditing Standard No. 3, Audit Documentation; the International Auditing and Assurance Standards Board's exposure draft, ISA 230, Audit Documentation, issued in September 2004; suggestions received from the National Association of State Boards of Accountancy; and Government Auditing Standards issued by the Comptroller General of the United States. The proposed SAS: 1. Uses an "experienced auditor" as a reference point. The proposed SAS requires the auditor to consider, when preparing audit documentation, the needs of an experienced auditor having no previous connection with the audit to understand the procedures performed, the evidence obtained, and specific conclusions reached. An experienced auditor, for the purposes of this Statement, is defined as an individual who possesses the competencies and skills that would have enabled him or her to perform the audit and therefore has an understanding of audit processes and of auditing and reporting issues relevant to the industry in which the entity operates. 2. Lists factors that the auditor should consider in determining the nature and extent of the audit documentation to be prepared for a particular audit area or auditing procedure. 3. Requires the auditor, in documenting the nature, timing, and extent of audit procedures performed, to record (a) who performed the audit work and the date of such work and (b) who reviewed specific audit documentation and the date of such review. 4. Guides the auditor when making further changes to audit documentation after delivery of the auditor's report. It provides guidance on the auditor's response to information that becomes known in the period after the auditor's report. When new procedures are performed after this date, the auditor should document the change, when and by whom the changes were made, and the effect of the changes on the auditor's previous conclusions. 5. Proposes that the auditor assemble the audit documentation to form the final engagement file within 60 days following the delivery of the auditor's report to the entity. After this date, the proposed SAS requires the auditor not to delete or discard existing audit documentation, and to appropriately document any subsequent additions or changes. 6. Provides guidance on documentation that should be retained and requires the auditor to document audit evidence that is identified as being contradictory or inconsistent with the final conclusions, and how the auditor addressed the contradiction or inconsistency. 7. Specifies a minimum file retention period that is ordinarily not expected to be shorter than five years from the date of the auditor's report, recognizing that state statutes or other regulatory requirements may specify a longer retention period. 8. Requires the auditor to document his or her justification for a departure from the SASs in the working papers. In addition to the proposed audit documentation SAS, the exposure draft includes proposed amendments to SAS No. 1, Codification of Auditing Standards and Procedures (AICPA, Professional Standards, vol. 1, AU sec. 530.01 and .05, "Dating of the Independent Auditor's Report"). The proposed amendment requires that the auditor's report not be dated earlier than the date on which the auditor has obtained sufficient competent audit evidence to support the opinion on the financial statements. It also proposes an amendment to SAS No. 95, Generally Accepted Auditing Standards (AICPA, Professional Standards, vol. 1, AU sec. 150.04, "Generally Accepted Auditing Standards"). The amendment adds a requirement for the auditor to document his or her justification for a departure from the SASs in the working papers. This proposed SAS would supersede SAS No. 96 and amend SAS No. 1 and SAS No. 95.

Publication Date


Relational Format



Auditing -- Documentation -- Standards -- United States


Accounting | Taxation


Originally published by: American Institute of Certified Public Accountants; Copyright and permission to reprint held by: American Institute of Certified Public Accountants.

Proposed statement on auditing standards : Audit documentation;Audit documentation; Exposure draft (American Institute of Certified Public Accountants), 2005, Jan. 12



To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.