Submitted by: Submitted by fraserfield
Views: 732
Words: 441
Pages: 2
Category: Business and Industry
Date Submitted: 03/11/2012 08:19 PM
MEMORANDUM
To: Senior Accountant
From: A. Junior Accountant
Date: March 5, 2012
Subject: Communicating SAS 112/115 Changes
Adapting words to align more with the reader’s background will enhance the effectiveness of communicating the changes incorporated by SAS 115, which superseded SAS 112 (). Key differences between SAS 112 and SAS 115 lie in the scope of definitions of material weaknesses and significant deficiencies used to evaluate and communicate to management and those in charge of governance and aligning them with PCAOB Auditing Standard No. 5 (AICPA Website). Some areas of concern with communicating these changes both to our accountants and clients with limited experience are the use of unfamiliar words, technical words, and using acronyms with caution.
To ensure we communicate these changes effectively to both groups, we will provide separate memos to the firm’s accountants and our clients. Because of complexity in accounting terms, words more familiar to clients with limited accounting backgrounds were used. The titles of these standards alone are lengthy and use technical accounting terms, which can be confusing to clients. We have also given special attention to the use of acronyms by spelling terms and titles out first and defining these with more commonly used words ().
To ensure clarity within the firm, we have tailored our memo to inform the firm’s accountants of the changes with appropriate language familiar to the accounting field. This will ensure accountants understand the scope of the change from an accountant’s perspective and incorporate added definitions of weaknesses and deficiencies in audit reports. Communicating the key differences between the two standards and clarifying reasons for the change can help reveal implications affecting both our accountants and clients and provide a starting point for necessary adjustments.
Ensuring absolute clarity with these memos is imperative. We do not want clients to react negatively...