Sas No.116 Interim Financial Information

I have been assigned SAS No.116, Interim Financial Information. The AU Section of the Statement on Auditing Standards from No.116 is AU sec. 722.

Interim financial information means the financial information or statements covering a period less than a full year or for a 12-month period ending on a date other than the entity's fiscal year end. This section establishes standards and provides guidance on the nature, timing, and extent of the procedures to be performed by an independent accountant when conducting a review of interim financial information. The highest numbered paragraph is 53rd.

The Section firstly discusses the applicability that an accountant may conduct a review of interim financial information. The objective of a review of interim financial information is to provide the accountant with a basis for communicating that if the accountant is aware of any material modifications that should be made to the interim financial information so it can conform to the applicable financial reporting framework. The accountant should establish an understanding with the client. The accountant also should have sufficient knowledge of the entity's business and its internal control as they relate to the preparation of both annual and interim financial information. In an initial review of interim financial information, the accountant should perform procedures that will enable him or her to obtain the sufficient knowledge. The accountant who has audited the entity's financial statements for one or more annual periods would also have acquired sufficient knowledge of an entity's internal control.

There are certain procedures for conducting a review of interim financial information like analytical procedures, inquiries, and other procedures that address significant accounting and disclosure matters. Analytical procedures include comparing the interim financial information with comparable information for the immediately preceding interim...