Wiley Practitioner's Guide to GAAS 2013: Covering all SASs, SSAEs, SSARSs, and Interpretations

AU 431: Adequacy of Disclosure in Financial Statements

AU-C 705: Modifications to the Opinion in the Independent Auditor’s Report

AU EFFECTIVE DATE AND APPLICABILITY

Original Pronouncement	Statement on Accounting Standards (SAS) 32.
Effective Date	This statement currently is effective.
Applicability	Audits of financial statements in accordance with generally accepted auditing standards (GAAS).

AU-C EFFECTIVE DATE AND SUMMARY OF CHANGES

SAS No. 122, Codification of Auditing Standards and Procedures, is effective for audits of financial statements with periods ending on or after December 15, 2012.

AU-C Section 705 has no significant changes from the extant standard.

AU DEFINITIONS OF TERMS

Adequate disclosure. Material matters include the (1) form, (2) arrangement, and (3) content of the financial statements and the appended notes, including:

• Terminology used
• Amount of detail given
• Classification of items
• Bases of amounts

AU-C DEFINITIONS OF TERMS

Source: AU-C 705.06

Modified opinion. A qualified opinion, an adverse opinion, or a disclaimer of opinion.

Pervasive. A term used in the context of misstatements to describe the effects on the financial statements of misstatements or the possible effects on the financial statements of misstatements, if any, that are undetected due to an inability to obtain sufficient appropriate audit evidence. Pervasive effects on the financial statements are those that, in the auditor’s professional judgment:

• Are not confined to specific ...