Statements of Position

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Description

The Auditing Standards Board is considering the issuance of this proposed statement on standards for attestation engagements to provide guidance to practitioners who are engaged to examine and report on management's written assertion about the effectiveness of an entity's internal control structure over financial reporting. This proposed Statement provides guidance to assist the practitioner in: 1. Accepting an engagement. 3. Obtaining an understanding of the internal control structure. 4. Testing and evaluating the design effectiveness and the operating effectiveness of internal control structure policies and procedures. 5. Forming an opinion on management's assertion, using material weakness as the basis for determining whether the 6. Communicating reportable conditions. This proposed guidance would apply to auditors of insured depository institutions who examine management's assertions about the effectiveness of the internal control structure over financial reporting, as required by the Federal Deposit Insurance Corporation Improvement Act of 1991. This proposed Statement would supersede Statement on Auditing Standards (SAS) No. 30, Reporting on Internal Accounting Control (AICPA, Professional Standards, vol. 1, AU sec. 642). It differs from SAS No. 30 in that the proposed Statement: 1. Requires practitioners to consider whether management's assertion is based on reasonable criteria against which it can be evaluated, and whether the assertion is capable of reasonably consistent estimates or measurement using those criteria. (Unlike SAS No. 30, this proposed Statement does not define the specific criteria.) 2. Precludes the practitioner from reporting directly on the company's internal control structure. (Unlike SAS No. 30, this proposed Statement does not allow the practitioner to report directly on the company's internal control structure. Instead, the practitioner reports on management's assertion only.) 3. Precludes the practitioner from issuing a public report unless management's assertion is included in a separate written report that accompanies the practitioner's report. 4. Requires the practitioner to limit his or her report on management's assertion about the company's internal control structure when management elects to present its assertion only in a representation letter and not in a separate written report. 5. Updates the definition of internal control, including terminology and concepts that are consistent with SAS No. 55, Consideration of the Internal Control Structure in a Financial Statement Audit.

ISBN

ed92-04-20t

Publication Date

1992

Relational Format

Book

Keywords

Attest function (Auditing) -- Standards -- United States; Audited financial statements -- 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), 1992, Apr. 20

Proposed statement on standards for attestation engagements : reporting on an entity's internal control structure over financial reporting : supersedes SAS No. 30, Reporting on internal accounting control;Reporting on an entity's internal control structure over financial reporting : supersedes SAS No. 30, Reporting on internal accounting control

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