————————————————- ————————————————- Memorandum TO:Accountants FROM:—– SUBJECT:Changes to SAS 115 DATE:September 30, 2011 ————————————————- Overview The American Institute of Certified Public Accountants (AICPA) was founded in 1887, the AICPA represents the AICPA represents all Certified Public Accounts (CPA) nationally regarding rules and regulations and also serves as advocate to public interest groups and other professional organizations.
The AICPA develops standards regulations, educates its members on various directions, monitors and enforces compliance and ethical standards. Statement of Accounting Standards (SAS No. 115) was issued by the Auditing Standards Board (ASB); became effective for audit of financial statement for period ending on or after December 15, 2009. SAS 115 supersedes SAS 112 that had some weaknesses in its terminology, definitions and guidance for evaluating deficiencies. Benefits of the New Requirements The new requirement will establish standards rules and provides guidance on communicating matters related to your organization’s internal control over financial reporting identified on the next audit of financial statements * SAS 115 will prevent, detect and correct misstatements on a timely basis * It will provide reasonable assurance about your achievement and objectives with regard to the reliability of financial reporting effectiveness and efficiency of operations, and compliance with the new laws and regulations. Communication Upon completion of the audit, our firm will provide you with a management letter identifying the findings. * Our firm will still continue to monitor progress on all previous existing deficiencies or weaknesses from previous years. * All communications pertaining to deficiencies or weaknesses will be made available within 60 days following the completion of the report. * Our firm will provide a management letter of “no findings” for your records if no deficiencies are found. Audit is not a punishment, but in a process mechanism to help organizations have zero findings on their financial statement regardless of the size of the organization.
While requirements to report in writing all deficiencies or weaknesses may take more time, it will ensure for better communication and awareness. SAS 115 allows our firm to gain insightful information to better serve you in the future and help you improve internal control by eliminating deficiencies. We thank you for continuing trust in our firm for the past three 3 years and our staff is available to answer or walk through any process that might seem challenging with the new regulations. We will schedule a meeting with the members of your finance team to go over these regulations two weeks prior to our audit scheduled date.
References Anderson, B. (2007, June). The Management Letter After SAS 112. Retrieved from http://www. allbusiness. com/professional-services/accounting-tax-auditing/8900335-1. html Beichler, V. (2009, March). Communicating Internal Control-Related Matters in SAS No. 115. Tennessee CPA Journal. Retrieved from http://www. tncpa. org/journal/articles/communicatinginternal. pdf AICPA, (2010, September). Employee Benefit Plan Audit Quality Center. Statement of Auditing Standards (SAS) No. 115 Communicating Internal Control Related