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Objective
Consider updates to interim standards that address auditor responsibilities related to (i) certain events occurring between the balance sheet and the auditor’s report date and (ii) certain matters arising after the auditor’s report date, such as subsequently discovered facts and reissuance of the auditor’s report. This project considers updating AS 2801, Subsequent Events, AS 2905, Subsequent Discovery of Facts Existing at the Date of the Auditor’s Report, and certain other interim standards.
Background
AS 2801, Subsequent Events, addresses auditor responsibilities for certain events occurring subsequent to the balance-sheet date, but prior to the issuance of the financial statements. AS 2905, Subsequent Discovery of Facts Existing at the Date of the Auditor’s Report, addresses auditor responsibilities when the auditor, subsequent to the date of the auditor’s report, becomes aware of facts that may have existed at that date which might have affected the auditor’s report had the auditor then been aware of such facts.
These standards, along with certain other standards addressing the dating and reissuance of the auditor’s report, continue to be in effect substantially in the form adopted by the Board on an interim basis from the American Institute of Certified Public Accountants in April 2003.
Since these standards were developed, important developments in the auditing environment have taken place, including the following:
- Requirements regarding the identification and evaluation of subsequent events have been added to the applicable financial reporting frameworks;
- Risk assessment and auditor reporting standards were adopted by the PCAOB in 2010 and 2017, respectively; and
- Advancements in technology have led to greater availability and use of both information in electronic form and technology-based audit tools.
Staff analysis will take into account observations from the Board's oversight activities, audit firms' methodologies, academic research, recent reporting trends, the activities of other standard setters and regulators, and information from investors and other stakeholders.
Status
The staff is analyzing relevant information and developing a proposal for the Board's consideration.
