AICPA issues auditing guidance.

The American Institute of CPAs auditing standards board has published two statements on auditing standards relating to agreed-upon procedures engagements and one statement on standards for attestation engagements concerning requests for comfort letters.

SAS 75 and SSAE 4

Both SAS no. 75, Engagements to Apply Agreed-Upon Procedures to Specfied Elements, Accounts, or Items of a Financial Statement, and SSAE no. 4, Agreed Upon Procedures Engagements, were issued because of a wide diversity in practice and because important issues were not addressed in existing statements. "The new standards enable practitioners to be more responsive to client needs because the scope of each engagement under the standards is customized," said auditing standards board member Deborah D. Lambert, of Johnson, Lambert & Capron, Bethesda, Maryland. "Unlike in an audit or review, in these engagements the client and other report users determine the nature, timing and extent of the procedures performed. The standards give practitioners much more practical guidance on what they can do and how they might get it done."

An article about SAS no. 75 and SSAE no. 4 appears on page 87 of this issue. Both statements also appear in Official Releases on page 119.

SAS 76

Amendments to Statement on Auditing Standards no. 72, "Letters for Underwriting and Certain Other Requesting Parties," is effective for underwriters' letters issued after April 30, 1996.

SAS no. 72 required any party requesting a comfort letter (a special type of agreed-upon-procedures report issued in connection with a securities offering registered with the Securities and Exchange Commission) that did not have a due diligence defense under section 11 of the Securities Act of 1933 to provide CPAs with a letter making certain representations. The new statement provides reporting guidance when a comfort letter is requested without a representation letter. The amendments allow CPAs to provide another form of letter in these circumstances.

SAS no. 76 replaces some of the paragraphs in the earlier SAS, adds new paragraphs and provides a new example in the appendix. James S. Gerson, a partner of Coopers & Lybrand, New York, and a member of the ASB, said SAS no. 76 "gives CPAs guidance on another circumstance when letters are requested that SAS no. 72 did not fully address." Gerson added that "the most important thing about SAS no. 76 is that it provides an example of a letter (sometimes referred to as a ,'noncomfort comfort letter,) CPAs can use when someone other than an underwriter requests a letter or when the requester is unable to provide the representations SAS no. 72 requires."

Ordering Information

SAS no. 75 (product no. 060448JA) and SAS no. 76 (product no. 060449JA) are $8.50 each for members, $9.50 for non-members. Copies of SSAE no. 4 (product no. 023022JA) are $6.50 for members, $7.25 for nonmembers. To order, contact the AICPA order department at [phone], menu #1; fax no. [phone]. They will also be available on the Accountants Forum.