The Auditing Standards Board just issued Statements on Auditing Standards 141, which delays required implementation changes to auditor’s reports for audits and employee benefits plans from reporting periods ending from December 15, 2020 to December 15, 2021, with early adoption permitted.
These new reporting standards will change auditor’s reports and management’s responsibilities as follows:
Statement on Auditing Standards (SAS) 134, Auditor reporting and amendments, including amendments addressing disclosures in the audit of financial statements: The new standard makes significant changes to the layout and information to be included in the auditor’s report. The new audit report will also provide for the option to report on key audit matters in the body of the report. The SAS standard was developed to better align reporting standards with those of the international and public company auditor reporting standards.
SAS 136, Forming an opinion and reporting on financial statements of employ benefit plan subject to ERISA: The new standard provides changes similar to those of SAS 134 to be included in the auditor’s report and will also eliminate the “disclaimer of opinion” as well as the reference to limited scope audits. The standard will also provide clarification on management’s required representations and responsibilities.
We will contact our clients to discuss how the additional auditor’s opinion requirements may be beneficial to the company’s overall financial statement reporting.
Any accounting, business or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties.