The Auditing Standards Board of the American Institute of CPAs issued an update to the Statement on Auditing Standards (SAS) 136 in July 2019. The latest SAS, dubbed Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA, aims to improve audit effectiveness in several important areas, including communication, transparency, and risk assessment. These changes to the SAS’s reporting and auditing obligations put management and auditors under more scrutiny. The SAS’s new standards apply to financial statement audits for periods ending on or after December 15, 2021. The new SAS expands requirements most notably in the following areas:
- Additional engagement acceptance procedures and additional management representations
- Performing risk assessment procedures related to the plan document, plan tax status, prohibited transactions, and responding to those risks.
- Performing certain additional audit procedures unique to auditing ERISA plans
- Communicating additional matters (reportable findings) with those charged with plan governance.