AICPA Releases New Evidence Standard

The Auditing Standards Board (ASB) of the AICPA has issued its new evidence standard, Statement on Auditing Standards No. (SAS) 142, Audit Evidence. The SAS modernizes private company auditing standards by recognizing the critical value technology and information bring to today’s audit procedures.

“Our substantially revised standard addresses the evaluation of audit evidence and has been modernized to reflect our current business environment,” said Bob Dohrer, AICPA Chief Auditor. “It recognizes the use of automated tools and techniques such as audit data analytics, AI and remote observation tools to obtain audit evidence.”

What SAS 142 Does

New SAS 142 addresses the evolving nature of business, audit services and issues that have arisen since the ASB originally issued existing AU-C Section 500, Audit Evidence. The standard addresses:

  • Emerging technologies used by both preparers and auditors;
  • The application of professional skepticism;
  • The expanding sources of information to be used as audit evidence; and
  • The accuracy, completeness, relevance and reliability of audit evidence.

SAS 142 enhances’ the auditor’s assessment of whether sufficient and appropriate audit evidence has been obtained and establishes a multi-faceted consideration of attributes and factors in evaluating such audit evidence. It will primarily amend AU-C Section 500 in AICPA Professional Standards.

“The new standard is based on the premise that the auditor should evaluate information to be used as audit evidence notwithstanding the source from which it is obtained, or the procedures used to obtain the information,” explained Dohrer. “New attributes of information for the auditor to consider include, whether the information is corroborative or contradictory to management assertions, the authenticity of the evidence and its susceptibility to bias.”

Effective Date

SAS 142 will be effective for audits of financial statements for periods ending on or after December 15, 2022

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