Peters & Associates Key Memo

Topics: Audit, Internal control, Financial audit Pages: 1 (391 words) Published: October 28, 2014

Peters and Associates
Memorandum
Date: June 28, 2014
To: Peters and Associates Accounting Department
Cc:Bobby Peters, Auditor
Joanne Hubbard, Senior Deputy Auditor

From:Kiona Peters, Junior Accountant
Subject: SAS 112 and 115 Regulation Rule Changes
Purpose
Of the many recent auditing standards issued by the AICPA, SAS No. 112 seems to be generating many questions. Therefore, the GAQC sponsored a member-only conference call titled, The Impact of SAS No. 112 on Governmental Financial Statement Audits, to assist members in understanding the provisions of this new standard and to provide members with an opportunity to have questions answered. The call was held on Thursday, January 4, 2007, from 1:00pm to 2:30pm (EST). Participants were able to ask questions and received a copy of the presentation slides.

Changes
The call also briefly discuss the upcoming expected revisions to Government Auditing Standards to adopt the provisions of SAS No. 112 and also the status of an ongoing project between the AICPA and the U.S. Office of Management and Budget to determine how SAS No. 112 will affect audits performed under OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. SAS No. 115 includes much of what was outlined in SAS No. 112 as it provides guidance to enhance the auditor's ability to evaluate deficiencies in internal control identified during an audit, and then communicate those deficiencies that the auditor believes are significant deficiencies or material weaknesses to management and those charged with governance. The key differences between SAS No. 115 and SAS No. 112 are in the definitions of material weaknesses and significant deficiencies so they are aligned with the PCAOB Auditing Standard No. 5, with the most significant change being to the definition of significant deficiencies. Additional guidance for making the determination as to whether a deficiency is a material weakness or significant deficiency has...
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