AICPA Proposes Audit Standard for Interim Financial Info

The Auditing Standards Board (ASB) of the American Institute of CPAs (AICPA) has issued a proposed Statement on Auditing Standards (SAS) entitled "Interim Financial Information." The document defines interim financial information as financial information or statements covering a period of less than a full year or for a 12-month period ending on a date other than the entity's fiscal year.

The main reasons for the update, which would replace the standard previously issued on the subject (Auditing Standards No. 71), are to provide additional guidance on the requirements for timely filings set by the Securities and Exchange Commission (SEC), address the recommendations of the Public Oversight Board's Panel on Audit Effectiveness, and incorporate the recommendations of the AICPA's Professional Issues Task Force on "Quarterly Review Procedures for Public Companies."

The proposed standard includes:

  • Guidance for initial reviews of interim financial information. A review is an initial review if the accountant has not audited the financial statements of the prior year-end.

  • Requirements for additional procedures. These include comparing disaggregated revenue data for the current period with that of comparable prior periods, obtaining evidence the interim financial information agrees or reconciles with the accounting records, and making certain inquiries of management as to their knowledge of fraud or fraudulent financial reporting.

  • Guidance on matters related to an entity's ability to continue as a going concern.

The proposed standard also includes examples of analytical procedures that accountants may consider performing, unusual or complex situations that accountants would ordinarily consider inquiring about, and illustrative representation letters.

The effective date would generally be for interim periods in 2003. Comments are requested by September 26, 2002 and should be sent to smacey@aicpa.org. Any comments received on the proposal will be considered a matter of public record.

Download the exposure draft.

-Rosemary Schlank

You may like these other stories...

The Public Company Accounting Oversight Board (PCAOB) on Tuesday adopted a new auditing standard and amendments in three areas of the audit that could pose an increased risk of material misstatement in company financial...
Read more from Larry Perry here and in the Today’s World of Audits archive.In my last article, I presented an overview of one of the first steps in the preplanning phase of an audit engagement: reviewing prior year...
Read more from Larry Perry here and in the Today’s World of Audits archive.AU-C Section 800, Special Considerations—Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks (SPFs),...

Upcoming CPE Webinars

Jul 16
Hand off work to others with finesse and success. Kristen Rampe, CPA will share how to ensure delegated work is properly handled from start to finish in this content-rich one hour webinar.
Jul 17
This webcast will cover the preparation of the statement of cash flows and focus on accounting and disclosure policies for other important issues described below.
Jul 23
We can’t deny a great divide exists between the expectations and workplace needs of Baby Boomers and Millennials. To create thriving organizational performance, we need to shift the way in which we groom future leaders.
Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.