Why is SAS 115 (formally SAS 112) considered significant?
SAS 115 (formally SAS 112) changes the process for evaluating deficiencies that come to auditors’ attention and brings the thresholds for reporting control deficiencies in line with the thresholds required for public companies. As these revised thresholds effectively lower the bar, it is expected that the reporting of what are now defined as either significant deficiencies or material weaknesses will be become increasingly more prevalent. There is a possibility that items not previously identified as control deficiencies could rise to what has now been defined as a significant deficiency or a material weakness simply as a result of imposing a new definition on the auditor, not as a result of any deterioration in the University’s system of internal control. The materiality of the control deficiency is determined based on what potentially could go wrong, not just on the amount of actual misstatements.