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PRONOUNCEMENT ANALYZED: A proposed Statement on Auditing Standards
EFFECTIVE DATE: See later discussion
SUMMARY AND HIGHLIGHTS
THE PROPOSED SAS WOULD ESTABLISH NEW STANDARDS FOR A CONCURRING PARTNER'S REVIEW OF SEC ENGAGEMENTS. IT WOULD ALSO AMEND EXISTING AUDITING STANDARDS TO INCORPORATE THE EFFECTS OF APPLICABLE PROVISIONS OF THE SARBANES-OXLEY ACT OF 2002.
INTRODUCTION
The proposed omnibus SAS would create a new SAS, Review of SEC Engagements by a Reviewing Partner, which would establish standards for a concurring/reviewing partner's review of the audit of a public company's financial statements, the review of a public company's interim financial information, and the audit of a public company's internal control over financial reporting. The proposed SAS would also amend various existing standards to reflect the impact of certain provisions of the Sarbanes-Oxley Act.
PROPOSED STANDARDS
Following is a brief discussion of the main elements of the proposed SAS.
ConcurringPartner Review of SEC Engagements
* As required by the Sarbanes-Oxley Act, the proposed SAS would require a concurring partner's review of (1) the audit of a public company's financial statements, (2) the interim review of the entity's financial information, and (3) the audit of the entity's internal control over financial reporting.
* The objectives of the concurring review would be that no matters have come to the concurring partner's attention that would cause the partner to believe, as applicable, that (1) the financial statements are not in conformity with GAAP or that the audit was not conducted in accordance with GAAS, (2) material modifications must be made to the interim financial information for such information to be in conformity with GAAP or that the interim review was not performed in accordance with SAS 100, Interim Financial Information, or (3) management's assertion concerning internal control is not fairly stated or that the audit of internal control was not conducted in accordance with GAAS (see Bulletin No. 2003-13 dated March 2003 for a discussion of a proposed SAS that would establish standards for auditing an entity's internal control over financial reporting in conjunction with a financial statement audit).
* The concurring partner's conclusions would have to be based on all relevant facts and circumstances and would require the concurring partner to perform certain specified procedures.
* A concurring...