Proposed Statement on Auditing Standards, Subsequent Events and Subsequently Discovered Facts

The AICPA Auditing Standards Board (ASB) has issued an exposure draft, Proposed Statement on Auditing Standards, Subsequent Events and Subsequently Discovered Facts, that supersedes SAS No. 1, Codification of Auditing Standards and Procedures, AU section 530, Dating of the Independent Auditor’s Report, as amended; AU section 560, Subsequent Events, as amended; AU section 561, Subsequent Discovery of Facts Existing at the Date of the Auditor’s Report, as amended; and SAS No. 58, Reports on Audited Financial Statements, paragraphs .71–.73, as amended, [AICPA, Professional Standards, vol. 1]).

This proposed SAS was issued April 10, 2009 with a comment period that ends July 15, 2009. It will be effective for audits of financial statements for periods beginning on or after December 15, 2010. This effective date is provisional but will not be earlier than December 15, 2010.

This proposed SAS is part of the ASB’s strategy to its standards with those of the International Auditing and Assurance Standards Board (IAASB). It converges with ISA no. 560, Subsequent Events.

In addition to converging with ISA No. 560, the proposed SAS also combines elements of existing standards and considers the impact of accounting guidance related to subsequent events.

Changes From Existing Standards
The proposed SAS does not change or expand SAS No. 39 in any significant respect.

You should be aware that the proposed SAS eliminates the accounting guidance related to subsequent events from the auditing literature. The Financial Accounting Standards Board (FASB) concluded that accounting guidance related to subsequent events should reside in the accounting literature established by FASB and decided to include that guidance in its Accounting Standards Codification.

The complete exposure draft is available for download at www.aicpa.org.

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