PwC submitted a comment letter supporting the Auditing Standards Board’s (ASB) proposed Statement on Auditing Standards to amend AU-C section 920, Letters for Underwriters and Certain Other Requesting Parties, As Amended (the proposed SAS). We support the objectives of the proposed SAS to avoid unintended changes to previous practice and to enhance the clarity of the guidance. We recommend that the ASB do the following in finalizing the SAS:
- Incorporate the definition of “interim financial information” from AU-C 930, Interim Financial Information, and replace references to “interim financial statements” with references to “interim financial information” throughout AU-C 920, including in the illustrative letters
- Review the different types of “caveat” language that is used in the comfort letter examples to determine whether such differences should be eliminated or whether they are appropriate and, if so, to clarify the circumstances that make such differences appropriate
- Identify, investigate and resolve differences in the wording of proposed amendments as they appear in the proposed SAS and in the Supplement to the Exposure Draft
- Issue the entirety of AU-C 920 as the final SAS to provide additional context for the changes being made, particularly changes to the illustrative letters
Our letter also identifies a number of editorial changes for the ASB’s consideration.