What are Statements on Auditing Standards?

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  • Written By: Osmand Vitez
  • Edited By: Kristen Osborne
  • Last Modified Date: 15 August 2019
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Statements on auditing standards are written guidelines provided by the American Institute of Certified Public Accountants (AICPA) to aid external auditors during the audit process. These statements reflect the proper application or guidance for applying generally accepted auditing standards (GAAS) to the audit cycles of non-public companies. Publicly held companies are subject to auditing guidelines provided by the Securities and Exchange Commission (SEC) and the Sarbanes-Oxley Act of 2002. Statements on auditing standards are usually abbreviated as “SAS,” followed by the number and title issued by the AICPA, which regularly publishes additional information or updates to these standards.

As of 2010, approximately 70 statements on auditing standards were in use by public auditors and accounting firms. These standards date back as far as 1972, with the most current standard issued in December 2009. The AICPA updates the statements on auditing standards as new financial accounting issues arise and auditors may need more information for properly applying GAAS during the audit of the company.

While GAAS represents the standards on which the audit quality is to be performed or reviewed by public accounting firms, statements on auditing standards provide specific instructions for auditing the company’s financial information. Auditing standards can be quite detailed depending on the issue they cover or attempt to explain for accountants conducting the audit. The AICPA also issues other auditing statements; these additional statements include standards for attestation engagements and quality control standards maintained by the public accounting firm.


The AICPA statements on standards for attestation engagements detail how auditors should interact with companies and their management groups when discussing the audit process. The AICPA also provides information on conducting compliance audits, providing accurate documentation to the company regarding variances or material misstatements found during the audit and reviewing the organization’s internal controls relating to financial information. Auditing internal controls is a new function of the audit cycle; many companies have implemented internal controls after the major accounting scandals of 2001 were discovered in major companies like Enron, WorldCom and Sunbeam.

Arthur Andersen, one of the original big eight accounting firms, faced significant issues regarding its culpability in the accounting scandals of Enron and WorldCom. The violations of professional accounting standards exhibited by Arthur Anderson led the AICPA to institute quality control standards for public accounting firms. These quality control standards ensure public accounting firms maintain independence and integrity when conducting audits and applying the statements on auditing standards to their clients accounting information.


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