Exposure of Clarified Risk Assessment Standards

In late January 2009, the AICPA's Auditing Standards Board (ASB) released for exposure certain of its risk assessment standards rewritten as part of its clarity project. The proposed risk assessment standards have been redrafted into a format that clearly identifies objectives, relevant definitions, requirements, and application and other explanatory material.

For additional information, please visit our webpage dedicated to the Clarity Project as well as read the press release regarding the release of the exposure suite of clarified risk assessment standards and Question and Answers on redrafted risk assessment standards.

Download the Exposure Drafts:

• Explanatory Memo
  
  
  • Exhibit A – Comparison of Proposed Statements on Auditing Standards Related to Risk Assessment With the Corresponding International Standards on Auditing
    
    
  • Exhibit B – Summary of Differences Between the PCAOB’s and the ASB’s Proposed Risk Assessment Standards
    
    
  
  
• Proposed SAS, Audit Evidence (Redrafted)
  
  
• Proposed SAS, Materiality in Planning and Performing an Audit (Redrafted)
  
  
• Proposed SAS, Evaluation of Misstatements Identified During an Audit
  
  
• Proposed SAS, Planning an Audit (Redrafted)
  
  
• Proposed SAS, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement (Redrafted)
  
  
• Proposed SAS, Performing Audit Procedures in Response to Assessed Risks and Evaluating the Audit Evidence Obtained (Redrafted)
  

Download the Supplementary Material:

• Comparison of Proposed SAS, Audit Evidence (Redrafted) to ISA 500
  
  
• Comparison of Proposed SAS, Materiality in Planning and Performing an Audit (Redrafted) to ISA 320
  
  
• Comparison of Proposed SAS, Evaluation of Misstatements Identified During the Audit to ISA 450
  
  
• Comparison of Proposed SAS, Planning an Audit (Redrafted) to ISA 300
  
  
• Comparison of Proposed SAS, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement (Redrafted) to ISA 315
  
  
• Comparison of Proposed SAS, Performing Audit Procedures in Response to Assessed Risks and Evaluating the Audit Evidence Obtained (Redrafted) to ISA 330

Extant Risk Assessment Standards

To further enhance audit quality, the AICPA Auditing Standards Board, in early 2006, issued a set of eight Statements on Auditing Standards (SAS Nos. 104-111), collectively referred to as the Risk Assessment Standards. These Standards became effective for audits of financial statements for periods beginning on or after December 15, 2006.

• View a summary of the Standards
• Read the Standards
• Find Implementation guidance and CPE related to the Standards including:
  • Technical Practice Aids (TIS):
    • TIS 8100.01 - Determining the Effective Date of a New Statement on Auditing Standards for Audits of a Single Financial Statement
    • TIS 8100.02 - Determining the Effective Date of a New Statement on Auditing Standards for Audits of Interim Periods
    • TIS 8200.05 – Testing the Operating Effectiveness of Internal Control
    • TIS 8200.06 – The Meaning of Expectation of the Operating Effectiveness of Controls
    • TIS 8200.07 – Considering a Substantive Audit Strategy
    • TIS 8200.08 – Obtaining an Understanding of the Control Environment
    • TIS 8200.09 – Assessing Inherent Risk
    • TIS 8200.10 – Defaulting to Maximum Control Risk
    • TIS 8200.11 – Ineffective Controls
    • TIS 8200.12 – Use of Walkthroughs
    • TIS 8200.13 – Documenting Internal Control
    • TIS 8200.14 – Suggesting Improvements in Internal Control
    • TIS 8200.15 – Identifying Significant Deficiencies
    • TIS 8200.16 – Examining Journal Entries
  • Audit Risk Alert, Understanding the New Auditing Standards Related to Risk Assessment
  • Audit Guide, Assessing and Responding to Audit Risk in a Financial Statement Audit
  • CPE Self Study:
    • Auditor’s Risk Assessment Process: Tackling the New Risk Assessment SASs
    • Detecting Misstatements: Integrating SAS No. 99 and the Risk Assessment Standards
    • Risk Assessment Standards - Understanding the Entity and Assessing Risk
  • Related Articles:
    • "Assessing and Responding to Risks in a Financial Statement Audit", Journal of Accountancy, July 2006
    • "Assessing and Responding to Risks in a Financial Statement Audit: Part II", Journal of Accountancy, January 2007
    • "Risk Assessment Standards in Action", Journal of Accountancy, January 2008