Focus on Risk Assessment Standards

The PCAOB urges firms to review systems and procedures.

The PCAOB is urging audit firms to review their systems and procedures to promote compliance with the board's Risk Assessment Standards.

The Risk Assessment Standards—Auditing Standards (AS) No. 8 through No. 15—were adopted in 2010. The standards address the auditor's assessment of and response to risk of material misstatements and the auditor's evaluation of the results of procedures performed in the audit. The standards include:

  • AS No. 8, Audit Risk.
  • AS No. 9, Audit Planning.
  • AS No. 10, Supervision of the Audit Engagement.
  • AS No. 11, Consideration of Materiality in Planning and Performing an Audit.
  • AS No. 12, Identifying and Assessing Risks of Material Misstatement.
  • AS No. 13, The Auditor's Responses to the Risks of Material Misstatement.
  • AS No. 14, Evaluating Audit Results.
  • AS No. 15, Audit Evidence.

The PCAOB expressed concern over the number and significance of deficiencies in compliance with these standards found in inspections from 2012 through 2014.

The PCAOB encouraged audit firms to review the report and consider the compliance of their practices related to the Risk Assessment Standards.

SPONSORED REPORT

Revenue recognition: A complex effort

Implementing the new standard requires careful judgment. Learn how to make significant accounting judgments and document them and collaborate with peers for consistent application.

VIDEO

How to Excel pivot a general ledger

The general ledger is a vast historical data archive of your company's financial activities, including revenue, expenses, adjustments, and account balances. J. Carlton Collins, CPA, shows how to prepare data for, and mine data with, PivotTables.

QUIZ

News quiz: Taking an economic snapshot and looking to the future

Recent news included IRS actions that affect individuals and partnerships and a possibly influential move by a Big Four accounting firm.Take this short quiz to see how much you know about the news.