Academic journal article Journal of Accountancy

New SAS on Passing the Baton

Academic journal article Journal of Accountancy

New SAS on Passing the Baton

Article excerpt

The American Institute of CPAs auditing standards board is seeking comments on an exposure draft that would supersede the 22-year-old Statement on Auditing Standards no. 7, Communications Between Predecessor and Successor Auditors. While not seeking to make radical changes, the proposed SAS recognizes changes in the auditor succession process over the past two decades.

"SAS no. 7 doesn't really address the proposal process that is common today," Stephen M. McEachern, an ASB member and chairman of the SAS no. 7 task force, told the Journal. (See "The Auditor Change Process," JofA, June96, page 73, for details on how auditors have been applying SAS no. 7). "In the ED, we've clearly laid out which communications between predecessor and successor auditors are required before an auditor accepts a new engagement and which are required after. There are more details on what the predecessor should supply, what the successor should look at and when"

Key features

Common in many firms have been standard letters from the predecessor auditor to the client clarifying the successor's access to working papers and from the predecessor to the successor auditor outlining the terms under which the successor will review working papers. The ED gives examples of both of these in appendices. Auditors would not be required to use these letters as is but could modify them, write their own or omit them entirely. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.