November 25, 2020, letter commenting on AICPA's September 2020 Exposure Draft, Proposed Statement on Auditing Standards – Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement

This letter provides GAO's response to the American Institute of Certified Public Accountants' (AICPA) Auditing Standards Board's (ASB) exposure draft, Proposed Statement on Auditing Standards – Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement. GAO provides standards for performing high-quality audits of government organizations, programs, activities, and functions and of government assistance received by contractors, nonprofit organizations, and other nongovernment organizations with competence, integrity, objectivity, and independence. These standards, often referred to as generally accepted government auditing standards (GAGAS), are to be followed by auditors and audit organizations when required by law, regulation, agreement, contract, or policy. For financial audits, GAGAS incorporates by reference the AICPA's Statements on Auditing Standards (SAS).