Statement on auditing standards, 058

              Statement on
Auditing Standards
Issued by the Auditing Standards Board
American Institute of
Certified Public Accountants
Reports on Audited
Financial Statements
SUMMARY
This Statement on Auditing Standards ( SAS) changes generally
accepted auditing standards by —
• Prescribing a new form for the auditor's standard report. Most sig­nificant
among the changes from the previous standard report is ( a)
the addition of an introductory paragraph that differentiates man­agement's
responsibilities for the financial statements from the
auditor's role in expressing an opinion on them based upon his
audit, ( b) an explicit acknowledgment that an audit provides rea­sonable
assurance within the context of materiality, and ( c) the addi­tion
of a brief explanation of what an audit entails.
• Revising the second standard of reporting to require a reference to
consistency in the auditor's report ( through the addition of an
explanatory paragraph following the opinion paragraph) only when
accounting principles have not been consistently applied.
• Changing the manner of reporting on a material uncertainty to
eliminate the " subject to" opinion qualification while retaining the
requirement to discuss the matter ( through the addition of an
explanatory paragraph following the opinion paragraph). This SAS
also expands the guidance for addressing and evaluating uncertain­ties.
Copyright © 1988 by the
American Institute of Certified Public Accountants, Inc.
1211 Avenue of the Americas, New York, N. Y. 10036- 8775
1234567890 AudS 898
AICPA
April 1988
58