April 2, 2007-- Issued in 2006 by the American Institute of Certified Public Accountants Auditing Standards Board, Statement on Auditing Standards (SAS) No. 112, Communicating Internal Control Related Matters Identified in an Audit (SAS 112), is effective for fiscal years ending on or after December 15, 2006.  SAS 112 supersedes SAS No. 60, Communication of Internal Control Related Matters Noted in an Audit and achieves consistency with Public Company Accounting Oversight Board Auditing Standard 2, An Audit of Internal Control Over Financial Reporting Performed in Conjunction With an Audit of Financial Statements (AS 2). 

SAS 112 provides guidance on identifying and evaluating internal control deficiencies.  The auditor must evaluate whether the actual and potential magnitude of such deficiencies, individually or in combination, are significant deficiencies or material weaknesses, as defined.  Significant deficiencies and material weaknesses identified by the auditor must be communicated, in writing, to management and those charged with governance. 

We believe that this new standard will result in the communication of more control deficiencies than in previous years.

For more information, contact your Accounting & Auditing representative at 215-564-1900.

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