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SAS 146-149 Recently Issued Auditing Standards #314426

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 published on 1/21/2026.

The objective of this course is to review three recently issued auditing standards: SAS Nos. 146-149.

The first section reviews the requirements found in SAS No. 146 related to quality management of an audit engagement. This section identifies the key elements of quality management, the important role and responsibilities of the engagement partner in managing the audit, the importance of quality to all members of the audit engagement team.

The section informs the reader of the various changes made to AU-C 210, Terms of Engagement, by SAS No. 147 in connection with fraud and noncompliance with laws and regulations. Topics including clarifying requirements and guidance related to a successor auditor’s inquiries of a predecessor auditor, responsibilities of the predecessor auditor to respond to successor auditor inquiries when authorized by management, and more.

The course addresses amendments made to AU-C 935, Compliance Audits, by SAS No. 148, to reflect changes made by recently issued auditing standards SAS No. 142 and 145. Topics include identifying the specific amendments made to AU-C 935 that are part of AU-C 315, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement. The course also identifies amendments to the appendix to AU-C 935 that identifies AU-C sections that are specific excluded from application to compliance audits.

Finally, SAS No. 149 addresses special considerations that apply to a group audit, including in circumstances in which component auditors are involved or when the group auditor makes reference to the audit of a referred-to auditor.

Table of Contents

Introduction8

SAS No. 146: Quality Management for an Engagement Conducted in Accordance With Generally Accepted Auditing Standards9

Objective of SAS No. 146	9
Background	9
General	9
Overview of SAS No. 146	12
General	12
The Firm's System of Quality Management and the Role of Engagement Teams	13
The Engagement Partner's Responsibilities	13
Amendments to Other SASs by SAS No. 146	14
Scope of SAS No. 146	15
General Scope	15
Definitions	15
Requirements of SAS No. 146	16
Leadership Responsibilities for Managing and Achieving Quality on Audits	16
Relevant Ethical Requirements, Including Those Related to Independence	17
Acceptance and Continuance of Client Relationships and Audit Engagements	18
Engagement Resources	19
Engagement Performance	21
Monitoring and Remediation	23
Taking Overall Responsibility for Managing and Achieving Quality	23
Documentation	23
Scalability Issues	25
Engagement Partner Communicating Professional Skepticism	26
REVIEW QUESTIONS	29
SUGGESTED SOLUTIONS	31

SAS No. 147: Inquiries of the Predecessor Auditor Regarding Fraud and Noncompliance With Laws and Regulations34

Objective of SAS No. 147	34
Background	34
General	34
Definitions	35
Requirements of SAS No. 147	35
Amendments to AU-C 210, Terms of Engagement	35
Flowchart from SAS No. 147	38
REVIEW QUESTIONS	39
SUGGESTED SOLUTIONS	40

SAS No. 148: Amendment to AU-C Section 93541

Objective of SAS No. 148	41
Background	41
General	41
General Amendments to AU-C 935 Appendix Arising from SAS No. 142	43
General Amendments to AU-C 935 Appendix Arising from SAS No. 145	43
Other Revisions	44
Requirements of SAS No. 148	44
Amendments to AU-C 935, Compliance Audits	44
Amendments to Appendix to AU-C 935	48
Amendments to Illustrate Report on Internal Control	51

SAS No. 149: Special Considerations — Audits of Group Financial Statements (Including the Work of Component Auditors and Audits of Referred-to Auditors)52

Objective of SAS No. 149	52
Overview of SAS No. 149	52
Requirements and Key Changes made by SAS No. 149	53
Scope and Applicability of the Standard	53
Risk-Based Approach	54
New Terminology to Describe Reporting Options	54
New Terms and Definitions	54
Managing and Achieving Audit Quality in a Group Audit- Engagement Partner	55
Equity Method Investments	56
Scalability	56
Professional Skepticism	56
Communications Between the Group Auditor and Component Auditors	57
Restrictions on Access to Information	57
Documentation Requirements	57
Auditor's Report	58
Group Audit Scenarios and Relevant Requirements	59
REVIEW QUESTIONS	60
SUGGESTED SOLUTIONS	61

Index63

Glossary64

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: 1/21/2026

Course Exam Questions (online): 10 (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 ID: 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:

SAS No. 146

Recall the date by which an engagement partner must take responsibility for determining that ethical requirements are fulfilled
Identify certain requirements an engagement partner must satisfy in performing an audit engagement
Recognize examples of resources assigned or made available by a firm to support performance of an audit engagement
Identify a type of unconscious bias defined in SAS No. 146

SAS No. 147

Identify when a successor auditor should request management to authorize a predecessor auditor's response to the successor auditor's inquiry
Recognize one of the new inquiries a successor auditor should make of a predecessor auditor by SAS No. 147
Recall the extent of a predecessor auditor's response to a successor auditor's inquiries when there are certain restrictions on the predecessor auditor.

SAS No. 148 and SAS No. 149

Identify an example of a recently issued auditing standard that SAS No. 148 incorporates into amendments to AU-C 935, Compliance Audits.
Recall examples of inherent risk factors related to identifying and assessing risks of material misstatement in a compliance audit.
Identify the party required to take overall responsibility for the quality on a group audit engagement in accordance with SAS No. 149.

Online Book, Online Exam

$25.00

Hardcopy Book, Online Exam

$37.00