AU-C Section 200.20-22: Complying with AU-C Sections Relevant to the Audit

AU-C Section 200.20-22 says:

".20 The auditor should comply with all AU-C sections relevant to the audit. An AU-C section is relevant to the audit when the AU-C section is in effect and the circumstances addressed by the AU-C section exist. (Ref: par. .A57–.A62)

.21 The auditor should have an understanding of the entire text of an AU-C section, including its application and other explanatory material, to understand its objectives and to apply its requirements properly. (Ref: par. .A63–.A71)
 
.22 The auditor should not represent compliance with GAAS in the auditor's report unless the auditor has complied with the requirements of this section and all other AU-C sections relevant to the audit."

The "Compliance With Standards Rule" (ET sec. 1.310.001) of the AICPA Code of Professional Conduct requires an auditor to comply with standards promulgated by the Auditing Standards Board (i.e., with GAAS).  The Accounting Standards Board (i.e., the ASB) publishes auditing standards in Statements on Auditing Standards (i.e., SASs), which are then codified into AU-C Sections.

GAAS:

• provide standards for fulfilling the overall objectives of the audit;
• address general responsibilities of the auditor;
• address those responsibilities for specific audit areas/topics; and
• provide the scope, effective dates, and any limitations of applying the standards. 

The audit may also be conducted in accordance with both GAAS and:

• auditing standards promulgated by the Public Company Accounting Oversight Board (i.e., the PCAOB);
• International Standards on Auditing;
• Government Auditing Standards; or
• auditing standards of a specific jurisdiction or country.

As such, it might be necessary for the auditor to perform additional procedures to comply with both GAAS and other standards.

To comply with GAAS, the auditor must comply with the entire AU-C Sections that are relevant, which include:

• Introductory Material: discusses the scope of the section; might include:
• the purpose and scope of the AU-C Section
• the subject matter of the AU-C Section
• the responsibilities of the auditor and others in applying the AU-C Section
• the context in which the AU-C Section is set
• Definitions:  a description of certain terms used in AU-C Sections.
• Objectives: gives the overarching goal of applying the section
• Requirements: gives the specific duties of the auditor in achieving the objectives
• Application and other explanatory material: supports the requirements with additional tips for achieving the requirements.
• Appendices: additional guidance to support the application and other explanatory material.

https://www.aicpa.org/content/dam/aicpa/research/standards/auditattest/downloadabledocuments/au-c-00200.pdf