PROPOSAL WOULD AMEND AUDITING STANDARD FOR COMPLIANCE AUDITS

The AICPA's Auditing Standards Board (ASB) is inviting comment on a proposed Statement on Auditing Standards (SAS) that would amend AU-C Section 935, Compliance Audits, in AICPA Professional Standards.

AU-C Section 935 addresses the application of generally accepted auditing standards (GAAS) to a compliance audit. AU-C Sections 200–900 address audits of financial statements as well as other kinds of engagements. Generally, these AU-C sections can be adapted to the objectives of a compliance audit.

However, certain AU-C sections, or portions thereof, are not applicable to a compliance audit because (1) they are not relevant to a compliance audit environment; (2) the procedures and guidance would not contribute to meeting the objectives of a compliance audit; or (3) the subject matter is specifically covered in AU-C Section 935. These AU-C sections, or specified requirements thereof, are identified in the appendix to AU-C Section 935, AU-C Sections That Are Not Applicable to Compliance Audits.

The changes proposed in the exposure draft would conform AU-C Section 935 to reflect the issuance of SASs No. 142, Audit Evidence, and No. 145, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement (AU-C Sections 500 and 315, respectively, in AICPA Professional Standards), and update the appendix in AU-C Section 935.  

The proposed amendment would go into effect for compliance audits for fiscal periods ending on or after Dec. 15, 2023, with one exception. A proposed amendment in the appendix with regard to AU-C Section 501, Audit Evidence — Specific Considerations for Selected Items, would go into effect for compliance audits for fiscal periods ending on or after Dec. 15, 2022, in order to align with the effective date of SAS No. 142.

Source: http//www.journalofaccountancy.com

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