Statement of Auditing Standards (SAS) No. 133, Auditor Involvement With Exempt Offering Documents, was issued July 26, 2017, and provides performance requirements for auditors involved with documents for exempt offerings such as municipal securities; securities issued by not-for-profit religious, education, or charitable organizations; crowdfunding; small issues of securities such as Regulation A offerings; and franchise offerings. SAS No. 133 will take effect on June 15, 2018; therefore, the content will be testable on the CPA exam beginning July 1, 2018.
Under SAS No. 133, an auditor is considered to “be involved” with documents for exempt offerings if both of the following occur:
The auditor is required to perform a specific set of procedures, and respond appropriately, if the auditor determines the information included or incorporated by reference in the exempt offering document could undermine the credibility of the financial statements and the auditor’s report. Auditors must also respond to any facts they learn after the date of the auditor’s report that, if they had been known at that time, could have caused the auditor to revise the report.
Additionally, auditors need to understand any procedures that management performed to identify subsequent events, and inquire of management and those charged with governance about whether any such events have occurred that might affect the financial statements. Further procedures required to be completed by the auditor might include reading the minutes of management meetings that have been held since the date of the auditor’s report and asking about the matters discussed at those meetings. Auditors should also read the entity’s most recent subsequent interim financial statements, if there are any.
It’s important to be aware of changes in authoritative literature which could impact how you answer the questions on the CPA Exam within that topic. Since exam material could conceivably change from one exam testing window to another, turn to Surgent for the latest updates. Our CPA Review team stays informed of all authoritative and pronouncement changes and ensures you’ll receive the news as soon as we do!
Susan J. Cox, M.Acc., CPA is a Senior Technical Editor for Surgent CPA Review. Susan received her graduate and undergraduate degrees from Florida State University. Prior to joining Surgent, Susan worked as a technical editor for Thomson Reuters, an accounting instructor for the University of South Florida, a senior internal auditor for GTE, and an experienced senior auditor for Arthur Andersen & Co.
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