Enhanced Formal Communication

TO: Management
FROM: C. R. Edit
DATE: July 15, 2013
SUBJECT: SAS 115 Auditing Standards

Please note there have been some updates to the Statement of Auditing Standards that provides information on communicating internal control matters. Statement on Auditing Standards (SAS) No. 112 still has useful information is superseded by SAS 115 effective for audits after December 15, 2009. According to "American Institute of CPAs" (2006-2013), the primary changes from SAS No.112 to SAS No.115 are definitional changes in the terms significant deficiency and material weakness (para. 1). One needs to take time to review the updates by going to the website and reviewing both publications. Auditors will use the new guidelines, and it is imperative to ensure accountants are in compliance and knowledgeable about what the standards entail. In addition to the new publication a PowerPoint presentation and an archived conference is available to help with getting the information needed to perform accurate audits in the near future.

SAS 115

The new guideline is that any issues identified need to be in a report to management in written form. Any issues from the past identified in the audit are also put in writing to the management team. Audits are an important function of a company, and   the department must realize that proper internal controls produce better audit results.

Definition Changes

The definition changes are important to conduct audits properly. The definitions are in reference to communicating internal controls. There are some terms no longer in the auditing standards. Reportable condition is no longer used. Significant deficiency and material weakness have definitions and examples of use in the PowerPoint and updated publication.


Please bring working knowledge current on the changes and prepare to communicate any relevant information to the clients. In addition clients may be contacting the firm to get clarification on the updated...