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In late April, the Auditing Standards Board (ABS) of the American Institute of Certified Public Accountants (AICPA) voted to delay the effective dates of seven private company auditing standards by one year. The delay was applied to Statements on Auditing Standards (SASs) No. 134-140.
The reason for the decision stems from challenges created as a result of the COVID-19 pandemic and ABS’s desire for firms to implement the standards to the highest quality after distractions from the pandemic diminish.
SASs No. 134-140 are primarily focused on substantial changes to the auditor’s report and will now take effect for audits of financial statements for periods ending on or after December 15, 2021. Even though this date has been delayed, early implementation is permitted and encouraged for firms that already have processes and systems in place. It is intended that SASs No. 134-140 be implemented at the same time as they are interrelated.
The standards affected are:
- SAS 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements, as amended;
- SAS 135, Omnibus Statement on Auditing Standards—2019;
- SAS 136, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA, as amended;
- SAS 137, The Auditor’s Responsibilities Relating to Other Information Included in Annual Reports;
- SAS 138, Amendments to the Description of the Concept of Materiality;
- SAS 139, Amendments to AU-C Sections 800, 805, and 810 to Incorporate Auditor Reporting Changes From SAS No. 134; and
- SAS 140, Amendments to AU-C Sections 725, 730, 930, 935, and 940 to Incorporate Auditor Reporting Changes From SAS Nos. 134 and 137.
As several of these new standards are designed to enhance the form and content included in the auditor’s opinion on the financial statements, we believe the additional time provided by the ABS will allow CPA firms to implement these standards properly as well as effectively communicate the changes to their clients.
Chris Arnone, CPA, is a Partner and Business Assurance Practice Leader at Moore Colson. Chris has over 20 years of experience providing audit, accounting and consulting services for companies in the transportation, manufacturing, distribution, staffing, private equity and venture capital industries.