Statement on Auditing Standards - Reports on Application of Requirements of an Applicable Financial Reporting Framework

Article excerpt

Statement on Auditing Standards (SAS) Reports on Application of Requirements of an Applicable Financial Reporting Framework supersedes SAS No. 50, Reports on the Application of Accounting Principles (AICPA, Professional Standards, vol. 1, AU sec. 625).

CONTENTS
Introduction
Scope of This Statement on Auditing
  Standards/i-5
Effective Date/6
Objective/7
Definitions/8
Requirements
Engagement Acceptance/9-11
Engagement Planning and Performance/12-13
Written Report/14
Application and Other Explanatory Material
Scope of This SAS/A1
Engagement Planning and Performance/A2-A4
Written Report/A5-A7
Exhibit: Illustrative Written Report to the
  Requesting Party/A8

INTRODUCTION

Scope of This Statement on Auditing Standards

1. This Statement on Auditing Standards (SAS) addresses the reporting accountant's responsibilities when requested to issue a written report on

a. the application of the requirements of an applicable financial reporting framework to a specific transaction or

b. the type of report that may be issued on a specific entity's financial statements. (Ref: par. A1)

2. This SAS also applies to oral advice provided by the reporting accountant

a. that the reporting accountant concludes is intended to be used by a principal to the transaction as an important factor considered in reaching a decision on the application of the requirements of an applicable financial reporting framework to a specific transaction or

b. on the type of report that may be issued on a specific entity's financial statements.

3. Differing interpretations may exist concerning whether and, if so, how existing accounting policies in an applicable financial reporting framework apply to new transactions or how new accounting policies in an applicable financial reporting framework apply to existing transactions. Management and others may consult with accountants on the application of the requirements of an applicable financial reporting framework to those transactions or to increase their knowledge of specific financial reporting issues. Such consultations may provide relevant information and insights not otherwise available.

4. This SAS does not apply to

a. a continuing accountant with respect to the specific entity whose financial statements the continuing accountant has been engaged to report on,

b. engagements either to assist in litigation involving accounting or auditing matters or to provide expert testimony in connection with such litigation, or

c. professional advice provided to another accountant in public practice.

5. This SAS also does not apply to communications such as position papers prepared by an accountant for the purpose of presenting views on an issue involving the application of the requirements of an applicable financial reporting framework, provided that these communications are not intended to provide guidance on the application of these requirements to a specific transaction. Position papers include newsletters, articles, speeches, and texts thereof; lectures and other forms of public presentations; and letters for the public record to professional and governmental standard-setting bodies.

Effective Date

6. This SAS is effective for engagements that end on or after December 15, 2012.

OBJECTIVE

7. The objective of the reporting accountant, when engaged to issue a written report or provide oral advice on the application of the requirements of an applicable financial reporting framework to a specific transaction or on the type of report that may be issued on a specific entity's financial statements, is to address appropriately

a. the acceptance of the engagement.

b. the planning and performance of the engagement.

c. reporting on the specific transaction or type of report.

DEFINITIONS

8. …