Setting the Standard for the New Auditor's Report

This study addresses the lack of research on the process by which authoritative auditing standards are established by presenting a longitudinal study of the two-year development of SAS No 58, "Reports on Audited Financial Statements", by the Auditing Standards Board. The study catalogues and examines the perspectives and influences of virtually all parties involved in establishing the standard, including the comment letters, from the Financial Executives Institute, Treadway Commission, and the Securities and Exchange Commission. The result is an extensive identification and rigorous analysis of the issues surrounding audit reports, alternative solutions considered, and the rationale underlying the ultimate decisions. The study also provides an elaboration on the content analysis research methodology used to assess the comment letters and how this assessment was integrated into the overall study. Additionally, the study describes the history behind audit reporting in the United States, and includes an exhaustive summary of the research related to the auditor's report in a well-organized annotated bibliography.