The AICPA’s Auditing Standards Board issued a pair of new auditing standards on Wednesday, May 8: 

SAS No. 134: Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements  

SAS No. 135:Omnibus Statement on Auditing Standards—2019 

“The Auditor Reporting suite of standards will benefit users of audited financial statements throughout the U.S. by placing the auditor’s opinion at the front of the report for added visibility and providing necessary transparency into the basis for the auditor’s opinion and the responsibilities of both entity management and auditors,” AICPA chief auditor Robert Dohrer said in a statement. 

SAS No. 134 is a suite of auditor reporting standards that includes a new AU-C section 701, Communicating Key Audit Matters in the Independent Auditor’s Report, and replaces the following AU-C sections in AICPA Professional Standards: 

  • Section 700, Forming an Opinion and Reporting on Financial Statements 
  • Section 705, Modifications to the Opinion in the Independent Auditor’s Report 
  • Section 706, Emphasis-of-Matter Paragraphs and Other-Matter Paragraphs in the Independent Auditor’s Report

SAS No. 134, which also amends various other AU-C sections, addresses the auditor’s responsibility to form an opinion on the financial statements and the form and content of the auditor’s report issued as a result of an audit of financial statements. It also addresses the auditor’s responsibilities, and the form and content of the auditor’s report, when the auditor concludes that a modification to the auditor’s opinion on the financial statements is necessary, and when additional communications are necessary in the auditor’s report.  

SAS No. 135 is intended to more closely align ASB guidance with the PCAOB’s standards by primarily amending AU-C section 260, Communications With Those Charged With Governance, AU-C section 550, Related Parties, and AU-C section 240, Consideration of Fraud in a Financial Statement Audit, in AICPA Professional Standards 

SAS Nos. 134 and 135 become effective for audits of financial statements for periods ending on or after Dec15, 2020. Early implementation is not permitted.  

Look to the SCACPA blog for continued analysis on the auditing standards as it becomes available.