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1 Tel: Fax: North Wabash, Suite 3200 Chicago, IL October 11, 2018 Via Ms. Sherry Hazel 1211 Avenue of the Americas New York, NY Re: Proposed Statement on Standards for Attestation Engagements, Revisions to Statement on Standards for Attestation Engagements No. 18, Attestation Standards: Clarification and Recodification Dear Ms. Hazel: BDO USA, LLP appreciates the opportunity to provide comments on the AICPA Auditing Standards Board s (ASB) Proposed Statement on Standards for Attestation Engagements (the proposed SSAE), Revisions to Statement on Standards for Attestation Engagements No. 18, Attestation Standards: Clarification and Recodification. Consistent with our comments in our letter dated December 4, 2017 on the Proposed Statement on Standards for Attestation Engagements, Selected Procedures, we support the development of attestation standards to meet current and potential market demands, with the objective of enhancing the communicative value of attestation reports to users. However, we continue to believe that an engagement performed in accordance with AT-C Section 215, Agreed-Upon Procedures Engagements (AT-C Section 215), should require (1) the engaging party or other party to take responsibility for the sufficiency of the procedures, (2) the responsible party to take responsibility for the assertions related to the engagement, and (3) the report to provide for a restriction on use. The removal of these requirements from the traditional assertion-based agreed-upon procedures engagement has the potential to increase attestation risk for practitioners and increase, rather than decrease, the expectation gap. We recognize that the ASB s Audit Issues Task Force recommended that the ASB adopt a project to evaluate opportunities to provide practitioners with additional flexibility when performing agreed upon procedures engagements, including the potential for the practitioner to be involved in the design of those procedures and issue general use reports. And while we are supportive of the overarching objective of the proposed SSAE to modernize the attestation standards, we believe it is not in the public interest to change the nature of the traditional agreed-upon procedures engagement. Rather than revise extant AT-C Section 215, we believe the development of a new type of attestation service to provide the necessary flexibility would provide the needed opportunities to meet future demand while also retaining the fundamental tenets of the traditional agreed-upon procedures engagement within AT-C Section 215. Our comments with respect to the specific questions posed in the Exposure Draft are set out below. BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms.

2 Page 2 of 6 Request for Comment 1 Proposed Changes That Affect All Attestation Engagements Please provide your views on the proposed changes discussed in the preceding section. Specifically, indicate whether you believe the proposed changes to the attestation standards are understandable and whether the application guidance is helpful in applying the new proposed requirements. The proposed SSAE would require a written assertion from the responsible party only if the practitioner were reporting on the assertion. We agree that the practitioner should not be required to request a written assertion from the responsible party when the practitioner is reporting directly on the subject matter in an examination or review engagement. However, as noted above, we continue to believe that a written assertion from the responsible party is necessary when the engagement is performed in accordance with AT-C Section 215. Furthermore, we note that the proposed SSAE has added a statement to the practitioner s report indicating that the practitioner is independent and has fulfilled the practitioner s other ethical responsibilities in accordance with relevant ethical requirements related to the engagement. We believe such a statement within the attest report is appropriate to provide clarity to users regarding the practitioner s independence. However, while we are supportive of such communication, we also believe that the ASB should further explore whether the proposed changes to the attestation standards are aligned with the AICPA Code of Professional Conduct given the nature of the changes to the performance of attestation engagements. Request for Comment 2 Proposed Changes That Affect Examination and Review Engagements Please provide your views on the proposed changes discussed in the preceding section. Specifically, indicate whether you believe the proposed changes are understandable and whether the application guidance is helpful in applying the new proposed requirements. With respect to paragraph.a81 of proposed AT-C Section 205 and paragraph.a68 of proposed AT-C Section 210, do the application paragraphs provide sufficient guidance to enable a practitioner to supplement or expand the content of the practitioner s report if the practitioner wishes to do so? If not, what additional guidance is needed? We note that consistent with International Standards on Assurance Engagements (ISAE) 3000 (Revised), Assurance Engagements Other Than Audits or Reviews of Historical Financial Information, the proposed SSAE provides application guidance explaining that a practitioner may issue a report that contains only the minimum required elements or issue a report that expands on or supplements those elements. Specifically, Paragraph.A81 of proposed AT C Section 205 and paragraph.a68 of proposed AT-C Section 210 explain that in addition to the basic elements, the report may include information or explanations that are not intended to affect the practitioner s opinion. We support these proposed provisions, which would enable a report to expand on the minimum required report elements to include information or explanations that are not intended to affect the practitioner s opinion or conclusion but that

3 Page 3 of 6 may address the informational needs of the intended users. To assist practitioners and provide for consistency in implementation, we believe additional examples of the type of information that may be communicated in the practitioner s report would be helpful, in the form of additional application material or included within an audit guide on the performance of attestation engagements. Additionally, we support the proposed requirement and related application material for the practitioner to use professional judgment to determine whether management has a reasonable basis for its assertion. However, we believe additional clarity should be provided for the circumstance where the practitioner concludes that management does not have a reasonable basis for its assertion. We recognize that the proposed SSAE provides reporting options for various circumstances, but we believe additional clarity would assist practitioners in consistent evaluation. Proposed guidance within AT-C 205 and AT-C 210 would require the practitioner to request a written representation stating whether the subject matter has been measured or evaluated against the criteria and, if so, the results of that measurement or evaluation. We believe such a representation is appropriate. Request for Comment 3 Proposed Changes that Affect Only Examination Engagements Please provide your views on the proposed changes to AT-C Section 205 as discussed in the preceding section. Specifically, please indicate whether you believe the proposed changes are understandable and whether the application guidance is helpful in applying the new proposed requirements. The proposed SSAE revises paragraph.a64 of extant AT-C Section 205, to permit the practitioner to use professional judgment in determining whether sufficient appropriate evidence has been obtained by performing other procedures when the responsible party fails to provide one or more written representations. (Extant paragraph.a64 states that failure by the responsible party to provide one or more written representations results in a scope limitation). While we believe a written representation should be obtained when practicable, we agree with the guidance included in the proposed application paragraphs to paragraph.54 that permits the use of professional judgment in determining whether sufficient appropriate evidence about a matter addressed by a missing written representation has been obtained by performing other procedures. Request for Comment 4 Proposed Changes that Affect Only Review Engagements Please provide your views on the proposed changes to AT-C section 210 as discussed in the preceding section. Specifically, please indicate whether you believe the proposed changes are understandable and whether the application guidance is helpful in applying the new proposed requirements.

4 Page 4 of 6 Are the illustrative reports clear and understandable with respect to the differences between a limited assurance engagement and an examination engagement? What are the potential benefits or implications of requiring the practitioner to include a description of the procedures performed in a limited assurance engagement? Also, please provide your views regarding whether an adverse conclusion is appropriate in a limited assurance engagement. We support the changes to the illustrative reports and believe that those reports are clear and understandable and appropriately differentiate a limited assurance engagement from an examination engagement. Furthermore, we support the change of the phrase review engagement to limited assurance, as we agree that this proposed revision more appropriately describes the nature and extent of work that may be necessary to obtain limited assurance on nonfinancial subject matter. We believe the proposed addition of a description of the procedures performed by the practitioner in the conduct of the limited assurance engagement in the report will benefit users in understanding what the practitioner did to obtain limited assurance on the subject matter or assertion, consistent with the reporting requirements of ISAE 3000 (Revised). We believe the transparency provided to users will enhance the value of the report to users and outweigh any potential unintended consequences. In particular, we believe the requirement in the proposed AT-C Section (h), which provides for the following paragraph to be included within the attestation report, establishes the context within which the informative summary is to be considered. However, we believe that this paragraph is missing one descriptor that would be meaningful to a user of the report, this being the inclusion of the word substantially in front of the word less as noted below. By including the word substantially the user of the report is alerted as to the limited nature of the procedures performed when contrasted with those performed for an examination engagement. A statement that the procedures performed in a limited assurance engagement vary in nature and timing from, and are substantially less in extent than, an examination, the objective of which is to obtain reasonable assurance about whether the subject matter is in accordance with (or based on) the criteria, in all material respects, or the responsible party's assertion is fairly stated, in all material respects, in order to express an opinion. As a consequence of the limited nature of the engagement, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had an examination been performed. We agree that the practitioner should be able to express an adverse conclusion when the practitioner concludes, after having obtained sufficient appropriate limited assurance evidence, that the subject matter is materially and pervasively misstated.

5 Page 5 of 6 Request for Comment 5 Proposed Changes that Affect Only Agreed Upon Procedures Please provide your views on the proposed changes to AT-C section 215 as discussed in the preceding section. Please indicate whether you believe the proposed changes are understandable and whether the application guidance is helpful in applying the new proposed requirements. Further, please specifically consider the following questions in your response: Is the proposed expansion of the practitioner s ability to perform procedures and report in a procedures-and-findings format beyond that provided by AT-C section 215 needed and in the public interest? Do the proposed revisions to AT-C section 215 appropriately address the objective of providing increased flexibility to the practitioner in performing and reporting on an agreed-upon procedures engagement while retaining the practitioner s ability to perform an agreed-upon procedures engagement as contemplated in extant AT C section 215? Do you agree with the proposed revision to AT-C section 215, whereby no party would be required to accept responsibility for the sufficiency of the procedures and, instead, the practitioner would be required to obtain the engaging party s acknowledgment that the procedures performed are appropriate for the intended purpose of the engagement? As noted in our introductory comments, we are concerned that the proposed changes to extant AT-C section 215 go beyond what is necessary to alleviate any practical challenges in the application of the extant standard, and may cause confusion among practitioners and users of agreed-upon procedures reports that are used extensively today. We note that many commenters to the September 2017 proposed new standard, Selected Procedures, expressed concern regarding the proposed changes to the nature of the current agreed-upon procedures engagement. In particular, we are concerned that the elimination of substantially all of the requirements that address the concepts of an assertion-based engagement will result in confusion in the marketplace and inconsistent implementation of the proposed standard. We do not believe the proposed changes to AT-C Section 215 are in the public interest. We continue to believe an agreed-upon procedures report should be restricted to the specified parties that assume responsibility for the sufficiency of the procedures. We understand the calls for modernization of the attestation standards and support the development of such standards; however, we believe a preferred approach to such modernization would be to develop a separate standard rather than make revisions to extant AU-C section 215. Request for Comment 6 Prohibition on the Performance of Limited Assurance Engagements on Certain Subject Matter Should AT-C section 210 of this proposed SSAE continue to prohibit the practitioner from performing a limited assurance engagement on (a) prospective financial information; (b)

6 Page 6 of 6 internal control; or (c) compliance with requirements of specified laws, regulations, rules, contracts, or grants? Please explain the rationale for your response. We agree with the prohibition on the performance of limited assurance engagements on (a) prospective financial information; (b) internal controls; and (c) compliance with requirements of specific laws, regulations, rules, contracts, or grants (collectively, the prohibited subject matters). While a practitioner performing a limited assurance engagement may perform procedures similar to those performed in an examination engagement, the nature, timing and/or extent of procedures will necessarily be limited. Moreover, user expectations relating to these matters may not be met by a limited assurance engagement. Request for Comment 7 Effective Date Are respondents supportive of the proposed effective date, specifically the prohibition on early implementation? Please provide reasons for your response. We support the proposed effective date as described in the proposed SSAE, which is for reports dated on or after May 1, Additionally, we agree that early implementation should not be permitted. ********** We appreciate your consideration of our comments and suggestions and would be pleased to discuss them with you at your convenience. Please direct questions to Phillip Austin at (312) or Jan Herringer at (732) Very truly yours, /s/ BDO USA, LLP BDO USA, LLP