AICPA Releases SAS 140

AICPA’s Auditing Standards Board (ASB) has issued the final Statement on Auditing Standards (SAS) No. 140, Amendments to AU-C Sections 725, 730, 930, 935, and 940 to Incorporate Auditor Reporting Changes From SAS Nos. 134 and 137. SAS 140 completes the ASB’s project to conform U.S. generally accepted auditing standards (GAAS) with the recently issued auditor reporting standards, starting with SAS 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements.

Auditor Reporting Standards

The ASB released SAS 134, the first of the recent auditor reporting amendments, in May 2019. Since that time, it has released the following SASs with the same effective dates:

  • SAS No. 135, Omnibus Statement on Auditing Standards—2019 (released with SAS 134);
  • SAS No. 136, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA;
  • SAS No. 137, The Auditor’s Responsibilities Relating to Other Information Included in Annual Reports;
  • SAS No. 138, Amendments to the Description of the Concept of Materiality; and
  • SAS No. 139, Amendments to AU-C Sections 800, 805, and 810 to Incorporate Auditor Reporting Changes From SAS No. 134.

Amendments to Standards by SAS 140

SAS 140 makes conforming changes to AU-C Sections 725, 730, 930, 935, and 940 to incorporate auditor reporting changes from SAS 134 through 137. The amendments also include changes to other AU-C sections in AICPA Professional Standards to reflect practice issues that have arisen since the most recent revisions to these AU-C sections. It also amends AU-C section 935, Compliance Audits, to be consistent with current governmental requirements.

Effective Dates

Although the effective date in SAS 140, as written, is for audits of financial statements for periods ending on or after December 15, 2020. As with SASs 134 through 139, early implementation is not permitted. However, the ASB has announced that it will hold a teleconference meeting on April 14, 2020 at which it will discuss extending the effective date for the suite of auditor reporting standards, including SAS 140, for one year, and to permit early implementation of the SASs. The AICPA is considering these amendments due to the COVID-19 pandemic.

The ASB is expected to release an exposure draft with the proposed amendments to SAS 134 through SAS 140 later this week.

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