Audit and Accounting Guide: Investment Companies

Chapter 12 Independent Auditor’s Reports and Client Representations¹

Update 12-1 Auditing: Dual Reporting

In March 2018, the Auditing Standards Board issued an interpretation to help auditors comply with reporting requirements under both AU-C section 700, Forming an Opinion and Reporting on Financial Statements² and PCAOB Auditing Standard (AS) 3101, The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion.³

Auditing Interpretation No. 4, Reporting on Audits Conducted in Accordance With Auditing Standards Generally Accepted in the United States of America and the Standards of the PCAOB (AU-C sec. 9700 par. .14–.21), has been determined to be consistent with generally accepted auditing standards (GAAS), but should not be construed to be an interpretation of PCAOB standards.

The interpretation No. 4 provides guidance for complying with AU-C section 700 in the context of AS 3101.

Interpretation No. 4 applies in situations when an auditor may be required by law or regulation—or voluntarily agrees—to perform an audit engagement in accordance with PCAOB standards for a company whose audit is not subject to PCAOB oversight.

For example, SEC rules permit audits of nonissuers under PCAOB standards in connection with offerings under Regulation A and Regulation Crowdfunding. In these situations, certain elements of the auditor’s report ...