They must also keep thorough documentation. In April 1988 the ASB issued SASs 53 to 61. SAS 58 on audit reports is effective for reports issued on or after january 1, 1989. SAS 55 on internal control structure is effective for audits of financial statements for periods beginning on or after January 1, 1990. All other SASs are effective for audits of financial statements for periods beginning on or after January 1, 1989.
Early application is permissible.
In the short time given to digest the new SASS, many auditors realize that educating clients about the content of the SASs and the anticipated cost and difficulty of applying them to existing audit engagements is as important as educating themselves about the pronouncements. Clients must be familiar with the new SASs in order to understand the SASS' impact on audit time and the need for increases in audit fees. In some cases, these practice aids may have been mechanically applied, and their use did not encourage or expand communication between auditor and client. The auditor will have to become more proficient in designing adequate audit programs and efficiently documenting evidence in work- papers to support audit conclusions. This article focuses on SASs 55 and 56 because they both require additional audit work, but also have the potential for improving audit efficiency.