We have audited the financial statements of ABC Company, which comprise the balance sheets as of December 31, 20X1 and 20X0, and the related statements of income, changes in stockholders’ equity, and cash flows for the years then ended, and the related notes to the financial statements. SAS 134 is effective for audit reports on financial statements for periods ending after December 15, 2019, with early adoption prohibited.
The following is an example of the new ASB report where there is no other legal or regulatory requirements (which are sometimes required, usually in government audits), but with the inclusion of KAMs. The last three sections are just the firm’s signature, city and state, and date. Both of these last two paragraphs include comments on each party’s responsibility for assessing the ability of the entity to continue as a going concern. Following the KAM text are paragraphs explaining the responsibilities of management and auditors’ responsibilities. The KAM paragraph discusses the most important matters the auditor considered during the audit. Next comes a new concept, key audit matters (KAM), is provided for audits where it is requested. The opinion will now be the first paragraph of the report, followed by the basis for opinion. The report begins with the title and appropriate addressee. It addresses the auditor’s responsibility to form an opinion on the financial statements and prescribes the form and content of the auditor’s report when issuing an unmodified opinion. The foundation section is AU-C section 700, Forming an Opinion and Reporting on Financial Statements. This standards, like all ASB guidance, applies to non-issuers in the United States. The Auditing Standards Board (ASB) issued SAS 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements, in May 2019. Significant changes are coming to the audit report.
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