AS 2901: Responding to Engagement Deficiencies After Issuance of the Auditor’s Report (effective on 12/15/2025)

The following new standard, AS 2901, Responding to Engagement Deficiencies After Issuance of the Auditor's Report, will be effective on December 15, 2025.

View the standard effective before December 15, 2025.

Amendments: Amending releases and related SEC approval orders

Summary Table of Contents

• .01  Introduction
• .02  Objective
• .03  Responding to the Engagement Deficiency
• .05 Documentation
• Footnotes (AS 2901 - Responding to Engagement Deficiencies After Issuance of the Auditor’s Report)

Introduction

.01       This standard applies when, after issuance of an auditor’s report, an engagement deficiency¹ is identified² on an audit of financial statements or internal control over financial reporting, unless it is probable³ that the auditor’s report is not being relied upon.

Note 1: In the absence of circumstances indicating that reliance is impossible or unreasonable (e.g., cessation of a trading market for issuer securities), inclusion of an auditor’s report (either directly or through incorporation by reference) in the most recent filing on an SEC form that requires inclusion of such an auditor’s report evidences that the report is being relied upon.  

Note 2: AS 2905, Subsequent Discovery of Facts Existing at the Date of the Auditor’s Report, and paragraph .98 of AS 2201, An Audit of Internal Control Over Financial Reporting That Is Integrated with An Audit of Financial Statements, may also apply in these circumstances. 

Objective

.02       The objective of the auditor is to take appropriate action to respond to identified engagement deficiencies.

Responding to the Engagement Deficiency

.03       For engagement deficiencies where the auditor did not obtain sufficient appropriate audit evidence to support the auditor’s opinion:

1. The auditor should perform procedures to obtain additional evidence, to the extent necessary, such that the opinion is supported by sufficient appropriate evidence; or
2. If the auditor is not able to obtain sufficient appropriate evidence to support the opinion, the auditor should take action to prevent future reliance on the report in the manner specified in paragraphs .06-.09 of AS 2905, Subsequent Discovery of Facts Existing at the Date of the Auditor’s Report.

.04       For other engagement deficiencies, the auditor should take action to address the deficiency, taking into account the nature and severity of the deficiency.

Note: As appropriate, actions a firm may take include preventive or corrective actions, or a combination, such as actions: (1) to address engagement deficiencies on completed engagements; and (2) to deter future engagement deficiencies.

Documentation

.05       The auditor should comply with:

1. Paragraph .16 of AS 1215, Audit Documentation, when documenting its response to engagement deficiencies within the working papers; and
2. QC 1000.82c when documenting the actions taken to address engagement deficiencies as part of the monitoring and remediation process of its QC system.