In October 2008, the AICPA Auditing Standards Board (ASB) issued Statement on Auditing Standards (SAS) No. 115, Communicating Internal Control Related Matters Identified in an Audit, which supersedes SAS No. 112 of the same title. This SAS is effective for audits of financial statements for periods ending on or after December 15, 2009. Earlier application is permitted.

SAS No. 115 amends SAS No. 112 and was issued by the Auditing Standards Board to provide guidance to auditors with respect to what should be communicated to management and those charged with governance in an organization. The key differences between SAS No. 115 and SAS No. 112 are in the definitions of material weaknesses and significant deficiencies to align them with PCAOB Auditing Standard No. 5, with the most significant change being to the definition of significant deficiencies. Guidance for making the determination as to whether a deficiency is a material weakness or significant deficiency has also been updated.

SAS Nos. 115 and 112 require you to make communications, in writing, to management and those charged with governance regarding significant deficiencies and material weaknesses in internal controls that you note in your audits.

Resources

The Center and the AICPA have taken a number of steps to compile and develop resources to assist auditors in implementing this new standard. Those resources can be accessed through the following links:

SAS No. 115:

SAS No. 115 – Communicating Internal Control Related Matters Identified in an Audit

AICPA's Audit Risk Alert "Communicating Internal Control Related Matters in an Audit – Understanding SAS No. 115 – Audit Risk Alert"

This Audit Risk Alert provides a detailed discussion of the requirements and guidance contained in SAS No. 115, including the differences between SAS No. 112 and SAS No. 115. It also addresses emerging practice issues and contains updated case studies to further illustrate the principles contained in SAS No. 115. Learn More>>

Examples of Internal Control Communications for Employee Benefit Plans

This non-authoritative document was prepared to assist Center members in preparing internal control communications to their employee benefit plan clients. It contains example comments that may be useful in preparing SAS No. 112 or SAS No. 115 communications, management letters, and other internal control communications. Learn More>>

Statement on Auditing Standards No. 115, Communicating Internal Control Related Matters Identified in an Audit: A Comparison with Statement on Auditing Standards No. 112

This document details the differences between SAS No. 115 and 112. Learn More>>

Summary of the Requirements of SAS No. 115, Communicating Internal Control Related Matters Identified in an Audit

This document provides a summary of the requirements of SAS No. 115. Learn More>>

SAS No. 115 Frequently Asked Questions
This SAS No. 115 FAQ document is intended to address the most common practitioner questions and concerns related to applying SAS No. 115. Learn More>>

SAS No. 115 Web Forum Presented by Chuck Landes and Steve Bodine (sponsored by the AICPA PCPS Firm Practice Center)

This Forum, "SAS No. 115 Amends and Replaces SAS No. 112", covers this new standard, which is not effective until periods ending on or after December 15, 2009, but early implementation is permitted. Learn More>>

SAS No. 112 - Communicating Internal Control Related Matters Identified in an Audit

Understanding SAS No. 112

This article, written by Charles Landes, Vice President—AICPA Professional Standards and Services, provides a discussion of many aspects of SAS No. 112. Learn More>>

Understanding SAS No. 112 and Evaluating Control Deficiencies - Audit Risk Alert

This audit risk alert provides a detailed discussion of several aspects of SAS No. 112, including identifying and evaluating control deficiencies and how the revisions will affect practice, and includes case studies. Learn More>>

SAS 103 and 112 Talking Points

This document outlines talking points to assist you in communicating the new requirements to your clients prior to commencing work to avoid confusion. Learn More>>

SAS No. 112 Frequently Asked Questions

SAS No. 112 FAQ document is intended to address the most common practitioner questions and concerns related to applying SAS No. 112. Learn More>>

Questions and Answers Regarding the Application of SAS No. 112

These questions and answers will help you determine situations that might be considered significant deficiencies or material weaknesses. Learn More>>

SAS No. 112 Roundtable Discussion
The Center sponsored this roundtable discussion call on May 10, 2007. Hear Chuck Landes, Vice President—AICPA Professional Standards and Services, and members of the EBPAQC Executive Committee discuss SAS No. 112 and its implications to EBP audits. Learn More>>