Health Care Entities – New Edition of Knowledge-Based Audits of Health Care Entities Published

We have published a new edition of Knowledge-Based Audits of Health Care Entities. This publication provides practitioners with an effective approach for conducting audits of for-profit (investor-owned) and not-for-profit health care entities.

This new edition incorporates current authoritative guidance, including:

• SAS No. 146, Quality Management for an Engagement Conducted in Accordance With Generally Accepted Auditing Standards (effective for periods beginning on or after December 15, 2025).
• SQMS No. 1, A Firm's System of Quality Management (effective December 15, 2025).
• SQMS No. 2, Engagement Quality Reviews (effective December 15, 2025).
• SQMS No. 3, Amendments to QM Sections 10, A Firm’s System of Quality Management, and 20, Engagement Quality Reviews (effective December 15, 2025).
• SAS No. 149, Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors and Audits of Referred-to Auditors) (effective for periods ending on or after December 15, 2026).

Single Audits – 2024 Edition of Knowledge-Based Single Audits Published

We have published the 2024 edition of Knowledge-Based Single Audits. This publication is intended to be used in addition to the financial statement audit methodologies provided in Knowledge-Based Audits methodology to conduct the compliance portion of the single audit.

The tools in the 2024 edition have been updated to help auditors conduct efficient and effective single audit engagements in accordance with GAAS and GAGAS and to take into account the latest literature, standards, and guidance, including the 2024 Revision of the Yellow Book (GAGAS) and the 2024 OMB Compliance Supplement. This new edition also incorporates:

• SAS No. 146, Quality Management for an Engagement Conducted in Accordance With Generally Accepted Auditing Standards (effective for periods beginning on or after December 15, 2025).
• SQMS No. 1, A Firm's System of Quality Management (effective December 15, 2025).
• SQMS No. 2, Engagement Quality Reviews (effective December 15, 2025).
• SQMS No. 3, Amendments to QM Sections 10, A Firm’s System of Quality Management, and 20, Engagement Quality Reviews (effective December 15, 2025).
• SAS No. 149, Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors and Audits of Referred-to Auditors) (effective for periods ending on or after December 15, 2026).

Real Estate Entities – New Edition of Knowledge-Based Audits of Real Estate Entities Published

We have published a new edition of Knowledge-Based Audits of Real Estate Entities. This publication is designed to help the auditor efficiently and effectively perform financial statement audits and, when applicable, audits of internal control over financial reporting, of nonpublic real estate entities in accordance with auditing standards generally accepted in the United States of America (U.S. GAAS).

This new edition incorporates current authoritative guidance, including:

• SAS No. 146, Quality Management for an Engagement Conducted in Accordance With Generally Accepted Auditing Standards (effective for periods beginning on or after December 15, 2025).
• SQMS No. 1, A Firm's System of Quality Management (effective December 15, 2025).
• SQMS No. 2, Engagement Quality Reviews (effective December 15, 2025).
• SQMS No. 3, Amendments to QM Sections 10, A Firm’s System of Quality Management, and 20, Engagement Quality Reviews (effective December 15, 2025).
• SAS No. 149, Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors and Audits of Referred-to Auditors) (effective for periods ending on or after December 15, 2026).

Life and Health Insurance Entities – AICPA Published New Edition of Audit and Accounting Guide Published

The AICPA has published a new edition of its Audit and Accounting Guide, Life and Health Insurance Entities. This AICPA guide was developed by the former Insurance Companies Committee and the Life Insurance Audit Guide Task Force to assist practitioners in performing and reporting on their audit engagements, and to assist management in the preparation of their financial statements in conformity with U.S. generally accepted accounting principles (GAAP) and statutory accounting practices.

This edition of the guide has been revised by AICPA staff to include certain changes necessary due to the issuance of authoritative guidance since the guide was originally issued and other revisions as deemed appropriate. Relevant guidance issued through April 1, 2024, has been considered in the development of this edition of the guide.

PCAOB Inspections – PCAOB Issues Spotlight on Observations From the Target Team’s 2023 Inspections

As discussed above, the PCAOB released a new staff Spotlight report, “Observations From the Target Team’s 2023 Inspections.” The PCAOB’s Division of Registration and Inspections has a target team of inspectors who execute in-depth reviews across audit firms with a focus on emerging audit risks and other topics.

The report provides auditors and other stakeholders with a view into the target team’s observations – including inspection results and good practices – in three focus areas for 2023:

• Significant or unusual events or transactions – The target team worked to gain insights into firms’ methodologies, practices, and execution of audits involving risks posed by significant or unusual events or transactions (e.g., data breaches, lawsuits, natural disasters).
• Crypto assets – As a result of crypto asset market disruptions and the corresponding emerging risks, the target team performed procedures to gather information about certain audits of public companies with material crypto asset activities.
• Multi-location audits – Given geopolitical turmoil (e.g., Russia-Ukraine war) and public companies switching from China-based audit firms to those in the U.S., the target team selected multi-location audits as a focus area in 2023.

Compliance Audits – New Edition of GAAS Update Service Published

We have published a new edition of the GAAS Update Service, A Refresher on Compliance Audits: AU-C Section 935, “Compliance Audits.” This new edition discusses AU-C Section 935, which is applicable when an auditor is engaged, or is required by law or regulation, to perform a compliance audit in accordance with all three of the following:

• Generally Accepted Auditing Standards (GAAS);
• The standards for financial audits under Government Auditing Standards (GAGAS), also referred to as the “Yellow Book”; and
• A governmental audit that requires the expression of an auditor opinion on compliance.

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Risk – New Edition of Governmental GAAP Update Service Published

We have published a new edition of the Governmental GAAP Update Service, Anybody Think There is Risk Here? This new edition discusses GASB No. 102, Certain Risk Disclosures, which focuses on risk disclosures related to the concentrations or constraints that limit a government’s ability to obtain resources or to control spending.