The Auditing Standards Board has issued Statement on Auditing Standards (SAS) No. 115, Communicating Internal Control Related Matters Identified in an Audit. SAS No. 115 supersedes SAS No. 112 and was issued to eliminate differences within the AICPA's Audit and Attest Standards resulting from the issuance of Statement on Standards for Attestation Engagements (SSAE) No. 15, An Examination of an Entity's Internal Control Over Financial Reporting That Is Integrated With an Audit of Its Financial Statements. SSAE No. 15 establishes standards and provides guidance to practitioners performing an examination of a nonissuer's internal control over financial reporting in the context of an integrated audit. SSAE No. 15 aligns the definitions of the various kinds of deficiencies in internal control and the related guidance for evaluating such deficiencies with the definitions and guidance in Public Company Accounting Oversight Board Auditing Standards No. 5, An Audit of Internal Control That is Integrated with an Audit of Financial Statements. SAS No. 115, in turn, aligns the definitions and related guidance for evaluating deficiencies in internal control with the definitions and guidance in SSAE No. 15.
Communicating Internal Control Related Matters Identified in an Audit
(Supersedes Statement on Auditing Standards No. 112, Communicating Internal Control Related Matters Identified in an Audit, AICPA, Professional Standards.)
Applicability
This Statement on Auditing Standards (SAS) establishes standards and provides guidance on communicating matters related to an entity's internal control over financial reporting identified in an audit of financial statements. It is applicable whenever an auditor expresses or disclaims an opinion on financial statements. In particular, this SAS
defines the terms deficiency in internal control, significant deficiency, and material weakness.
provides guidance on evaluating the severity of deficiencies in internal control identified in an audit of financial statements.
requires the auditor to communicate, in writing, to management and those charged with governance,1 significant deficiencies and material weaknesses identified in an audit.
This SAS is not applicable if the auditor is engaged to report on the effectiveness of an entity's internal control over financial reporting under AT section 501, An Examination of an Entity's Internal Control Over Financial Reporting That Is Integrated With an Audit of Its Financial Statements (AICPA, Professional Standards, vol. 1).
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