Auditors should use professional judgment of the circumstances to determine which effective date of AU-C Section 905 applies in a compliance audit performed pursuant to AU-C Section 935, Compliance Audits, and Office of Management and Budget Circular A-133, Audits of States, Local Governments and Non-Profit Organizations, according to a new Technical Question and Answer developed by two AICPA teams.
The Audit and Attest Standards and Governmental Auditing and Accounting teams developed the nonauthoritative guidance in TIS Section 9110.20. The guidance relates to which effective date should be used in a particular circumstance in AU-C Section 905, Alert That Restricts the Use of the Auditor’s Written Communication.
The guidance refers to circumstances in a compliance audit when:
- The financial statements of an entity are for a period prior to Dec. 15, 2012, and
- The opinion on compliance and reporting on internal control over compliance relating to that same period is issued after Dec. 15, 2012.
The effective date to be used depends on the auditor’s professional judgment of the circumstances, according to the guidance.