Statements of Position



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The proposed Statement provides guidance to an auditor in examining and reporting on financial statements that are required to include segment information in conformity with FASB Statement No. 14, "Financial Reporting for Segments of a Business Enterprise." According to the proposed Statement, an examination made for the purpose of expressing an opinion on financial statements taken as a whole ordinarily would not be sufficient to enable the auditor to express a separate opinion on the segment information. It states that the objective of auditing procedures applied to segment information should be to provide the auditor with a reasonable basis for concluding whether the information is presented in conformity with FASB Statement No. 14 in relation to the financial statements taken as a whole. Although the auditor's materiality judgments with respect to segment information would relate to the financial statements taken as a whole and not to any one particular segment, the proposed Statement notes that situations may arise in practice where the auditor will conclude that a matter relating to segment information is material to the financial statements taken as a whole even though, in his judgment, it is quantitatively immaterial to those financial statements. The Statement, if adopted, would require the auditor to apply certain auditing procedures to segment information presented in financial statements. Also, it recognizes that it may be necessary for the auditor to modify the audit tests that would otherwise be applied to the financial statements taken as a whole if those statements include segment information, and it identifies factors that should be considered by the auditor in making that determination. In addition, the proposed Statement provides guidance on the auditor's reporting responsibilities in connection with segment information.

Publication Date


Relational Format



Financial statements -- 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 : Segment information ;Segment information; Exposure draft (American Institute of Certified Public Accountants), 1977, Aug. 31



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