The Audit Report Returns to Its Roots

All through past century, the standard audit report has slowly and cautiously evolved. Most recently, in 2011, the AICPA's Auditing Standards Board (ASB) released Statement on Auditing Standards (SAS) 122, Statements on Auditing Standards: Clarification and Recodification, commonly referred to as its clarity standards. 

This revision to the standard audit report's format included captioned sections and new language that was meant to make it clearer what the role of the auditor is and differentiate it from that of management. Previous to that, the last significant revisions to the standard audit report (SAS 58, Reports on Audited Financial Accounts) were made in 1988 as part of a set of standards known as the "expectations gap" standards. An early effort to explain the duties of auditors to users was SAS 58.

The form and content of the "standard" audit report will significantly change with the expected adoption of a number of new audit reporting standards that the ASB suggested in November 2017. These reports will completely circle back to something akin to the nonstandard, "long-form" structure that predominated reporting in the first part of the 20th century, especially with the advent of "critical audit matters" (CAM), as they are known by the PCAOB. 


Adarsh R
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