Statement on Auditing Standards - Revised Applicability of Statement on Auditing Standards No. 100, Interim Financial Information

Article excerpt

(To revise paragraph .05 of AU section 722, Interim Financial Information [AICPA, Professional Standards, vol. 1])

1. The purpose of this amendment is to revise paragraph. 05 of Statement on Auditing Standards (SAS) No. 100, Interim Financial Information, as amended (AICPA, Professional Standards, vol. 1, AU sec. 722), such that the SAS would be applicable when the accountant audited the entity's latest annual financial statements, and the appointment of another accountant to audit the current year financial statements is not effective prior to the beginning of the period covered by the review New language is shown in boldface italics; deleted language is shown by strikethrough.

.05 An accountant may conduct, m accordance with this section, a review of interim financial information if

a. the entity's latest annual financial statements have been audited by the accountant or a predecessor;

b. the accountant either

i. has been engaged to audit the entity's current year financial statements, or

ii. [begin strikethrough]the accountant[end strikethrough] audited the entity's latest annual financial statements and, when it is expected that the current year financial statements will be audited, [begin strikethrough]expects to be engaged[end strikethrough] the appointment of another accountant to audit the current year financial statements is not effective prior to the beginning of the period covered by the review;

c. The [begin strikethrough]client[end strikethrough] entity prepares its interim financial information in accordance with the same financial reporting framework as that used to prepare the annual financial statements; and

d. [begin strikethrough]if[end strikethrough] when the interim financial information is condensed information, all of the following conditions are met:

i. The condensed interim financial information purports to conform with an appropriate financial reporting framework, which includes appropriate form and content of interim financial statements; for example, Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 270, Interim Reporting, and Article 10 of SEC Regulation S-X with respect to accounting principles generally accepted in the United States of America (5) or International Accounting Standard 34, Interim Financial Reporting, with respect to IFRS issued by the IASB, may be appropriate financial reporting frameworks for interim financial information.

ii. The condensed interim financial information includes a note that the financial information does not represent complete financial statements and should be read in conjunction with the entity's latest annual audited financial statements. …

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