What is SAS 115 (formally SAS 112)?

Statement on Auditing Standards No. 115 (formally SAS 112) “Communicating Internal Control Related Matters Identified in an Audit” establishes standards and provides guidance on communicating matters related to an entity’s internal control over financial reporting identified in an audit of financial statements. It is applicable whenever an auditor expresses an opinion on financial statements (including a disclaimer of opinion). In particular, this SAS:

  • defines the terms "significant deficiency" and "material weakness", incorporating the definitions already in use for public companies;
  • provides guidance on evaluating the severity of control deficiencies identified in an audit of financial statements; and
  • requires the auditor to communicate, in writing, to management and those charged with governance (e.g., Board of Regents), significant deficiencies and material weaknesses identified in an audit.

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