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New Audit Reporting Standards: SAS Nos. 134-141 #313426

Course Overview

Credit

Amount

CPA

Course Author: Steven C. Fustolo, CPA Field of Study (CPA): Auditing

Course Description

Course publication/revision date: This course was updated on 1/20/2026.

The objective of this course is to address the new auditor reporting standards issued by the Auditing Standards Board as SAS No. 134-141.

Topics include an overview of the new auditor’s report found in SAS No. 134’s AU-C 700A, including the new report’s format, positioning of sections within the report, title, headings, and expanded language; amendments made to various reporting standards by SAS No. 135; a review of THE new ERISA plan audit standard found in SAS No. 136, AU-C 703, including the format of the new ERISA-plan auditor’s report, positioning of sections of that report, the new ERISA Section 103(a)(3)(C) audit (formerly a limited-scope audit) and the auditor’s report thereon, expanded audit procedures and communications required by auditors of ERISA-plan financial statements; changes made by SAS No. 137 to the auditor’s procedures and reporting on other information, changes made to the definition of materiality by SAS No. 138, changes made to special reports by SAS No, 139, and amendments made by SAS No. 140 to supplementary information, required supplementary information, compliance audits, interim financial information, and audits of internal control over financial reporting.

Table of Contents

Overview of SAS No. 134-1419

SAS No. 134: Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements15

Overview of SAS No. 134	15
SAS No. 134's New AU-C 700A: Forming an Opinion and Reporting on Financial Statements	18
Introduction	18
Scope of New AU-C 700A	18
Definitions used in SAS No. 134, AU-C 700A:	19
Requirements of New AU-C 700A	20
Detailed Sections of the New Audit Report in AU-C 700A:	23
Examples of Auditor's Reports on Financial Statements	34
Other Reporting Issues- AU-C 700A	43
SAS No. 134 Amendments to Other Sections of SAS No. 122 and SAS No. 132	49
REVIEW QUESTIONS	54
SUGGESTED SOLUTIONS	56
SAS No. 134's New AU-C 701: Communicating Key Audit Matters in the Independent Auditor's Report	59
Objectives	59
Introduction	59
Scope of AU-C 701	60
Definitions used in AU-C 701	61
Requirements of AU-C 701	61
Examples- Key Audit Matter Paragraphs in the Auditor's Report	69
Other Reporting Issues- Key Audit Matters	73
REVIEW QUESTIONS	79
SUGGESTED SOLUTIONS	81
SAS No. 134's New AU-C 705A: Modifications to the Opinion in the Independent Auditor's Report	83
Objective of AU-C 705A	83
Scope of New AU-C 705A	83
Types of Modified Opinions	83
Definitions	84
Requirements of New AU-C 705A	85
Form and Content of the Auditor's Report When the Opinion Is Modified	88
Examples of Auditor's Reports from AU-C 705A	95
REVIEW QUESTIONS	111
SUGGESTED SOLUTIONS	112
SAS No. 134's New AU-C 706A: Emphasis-of-Matter Paragraphs and Other-Matter Paragraphs in the Independent Auditor's Report	114
Objective of AU-C 706A	114
Scope of AU-C 706A	114
Definitions Used in AU-C 706A	114
Requirements of AU-C 706A	115
Example Reports- AU-C 706A, as modified by the Author	122
REVIEW QUESTIONS	128
SUGGESTED SOLUTIONS	129

SAS No. 135: Omnibus Statement on Auditing Standards—2019131

Introduction	131
Amendments Made by SAS No. 135	132
REVIEW QUESTIONS	136
SUGGESTED SOLUTIONS	137

SAS No. 136: Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA138

Objectives	138
Introduction	138
Scope of AU-C 703 (SAS No. 136)	139
Requirements- ERISA Audit per AU-C 703	140
Considerations Relating to Form 5500 Filing	144
Auditor's Report on ERISA Plan Financial Statements	146
The New ERISA Section 103(a)(3)(C) Audit	156
Illustrations: Auditor's Reports - Employee Benefit Plans Subject to ERISA	169
REVIEW QUESTIONS	179
SUGGESTED SOLUTIONS	182

SAS No. 137: The Auditor's Responsibilities Relating to Other Information Included in Annual Reports186

Objectives of SAS No. 137	186
Introduction	186
Scope of SAS No. 137	188
Definitions used in SAS No. 137	190
Requirements of SAS No. 137	191
Exhibits: Other Information Sections to Be Included in Auditor's Reports	195
REVIEW QUESTIONS	199
SUGGESTED SOLUTIONS	200

SAS No. 138: Amendments to the Description of the Concept of Materiality202

Objectives of SAS No. 138	202
Introduction	202
Changes made by SAS No. 138	202

SAS No. 139: Amendments to AU-C Sections 800, 805, and 810 to Incorporate Auditor Reporting Changes from SAS No. 134205

Objectives of SAS No. 139	205
Introduction	205
Changes made by SAS No. 139 to AU-C 800, Special Considerations- Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks	205
Changes made by SAS No. 139 to AU-C 805, Special Considerations-Audits of Single Financial Statements and Specific Elements, Accounts, or Items of a Financial Statement	219
Changes made by SAS No. 139 to AU-C 810, Engagements to Report on Summary Financial Statements	226
REVIEW QUESTIONS	227
SUGGESTED SOLUTIONS	229

SAS No. 140: Amendments to AU-C Sections 725, 730, 930, 935, and 940 to Incorporate Auditor Reporting Changes From SAS Nos. 134 and 137231

Objectives of SAS No. 140	231
Introduction	231
Amendments made by SAS No. 140	232

SAS No. 141: Amendment to the Effective Dates of SAS Nos. 134–140249

Objectives of SAS No. 141	249
Background	249
Changes made by SAS No. 141	249
REVIEW QUESTIONS	251
SUGGESTED SOLUTIONS	252

GLOSSARY253

INDEX255

Course Details

Author: Steven C. Fustolo, CPA

Mr. Fustolo is a partner with the Boston CPA firm of James J. Fox & Company and Director of the National Tax Institute, Inc. He is a frequent lecturer and author of numerous tax and accounting issues affecting closely held businesses. An AICPA author, Mr. Fustolo’s articles are regularly featured in The Practical Accountant and other publications. He is the author of Practice Issues: Compilation and Review, Accounting and Auditing Reference Guide, Everything You Never Wanted to Know About GAAP, Enron: Fraud, Deception and the Aftermath, FASB Review for Industry, and FASB, SSARS and SAS Update and Review and numerous other books and manuals that have been published by Practitioners Publishing Company (PPC) and Commerce Clearing House (CCH). He is the recipient of several Outstanding Discussion Leader awards from many professional organizations including the New York and Florida Societies of CPAs. Mr. Fustolo’s course entitled FASB, SSARS and SAS Update and Review continues to receive accolades and is regarded as one of the top live CPE programs in the country today with ratings that average 4.91 on a scale of 5.0. He speaks regularly for professional groups including being a guest lecturer at the AICPA Advanced Accounting and Auditing Technical Symposium. Mr. Fustolo is the recipient of the Elijah Watts Sells Award (AICPA) and Silver Medal (Massachusetts) for scores received on the CPA Examination.

Publication/Revision Date: 1/20/2026

Course Exam Questions (online): 50 (multiple-choice)

Program Delivery Method: NASBA QAS Self-Study

Available Formats of Course Text: PDF only or PDF plus printed copy sent in the mail

Course Level, Prerequisites, and Advance Preparation Requirements

License	Course Level	Prerequisites	Advance Preparation Requirements
CPA	Overview	None	None

* This program is appropriate for professionals at all organizational levels.

Sponsor ID Numbers

National Registry of CPE Sponsors I.D.: 107615

State CPA Board Sponsor ID Numbers (where applicable)

Florida Division of Certified Public Accounting: 0004761

Hawaii Board of Public Accountancy: 14003

New York State Board for Public Accountancy: 002146

Ohio Accountancy Board: CPE .51 PSR

Pennsylvania State Board of Accountancy: PX178025

Texas State Board of Public Accountancy: 009349

Learning Objectives

As a result of studying the course material, you should be able to meet the objectives listed below:

I. SAS No. 134

Identify the types of audit reports that can be issued under new AU-C 700A.
Identify the definition of a written report.
Recognize an acceptable title for an auditor's report.
Recognize the order in which certain sections of the new auditor's report should be presented in AU-C 700A.
Recall how an auditor should report when conducting an audit in accordance with PCAOB standards.
Recognize the requirements and limitations with respect to communicating on key audit matters in accordance with new AU-C 701.
Identify examples of acceptable and unacceptable headings to use in modified reports under new ASU 706-A.
Recognize the order in which certain sections of a modified opinion should be presented in the new auditor's report in AU-C 705A.
Recognize examples of modified opinions as defined in AU-C 705A.
Identify examples of situations in which an auditor must or may include an emphasis-or-matter or other-matter paragraph as required by new AU-C 706A.

II. SAS No. 135

Recall examples of fraud risk factors expanded by SAS No. 135.

III. SAS No. 136

Identify expanded procedures auditors of ERISA-plan financial statements must perform in newly issued SAS No. 136 including a review of the draft Form 5500.
Identify the new ERISA Section 103(a)(3)(C) audit in SAS No. 136.

IV. SAS No. 137

Recognize the scope of the term "other information" and "annual report" as used in the newly issued SAS No. 137 pertaining to auditing and reporting other information.
Recall how an auditor should label other information in the auditor's report.

V. SAS No. 138 and 139

Recognize the new definition of materiality found in SAS No. 138.
Identify certain paragraphs in the new auditor's report on a special purpose framework.

VI. SAS No. 140 and 141

Recognize how an auditor should present required supplementary information under SAS No. 140's amendment of AU-C 730.
Identify amendments made to several auditing standards by SAS No. 140.

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