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News Highlights for May 2010

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The Auditing Standards Board recently issued six clarified Statements on Auditing Standards related to risk assessment resulting from its clarity project, through which all of its auditing standards will be redrafted over the next one to two years. The board also issued additional proposed SASs.

The goal of the clarity project is to make auditing standards easier to read, understand and apply. Consistent with the ASB’s strategy to converge its standards with those of the International Auditing and Assurance Standards Board, each proposed standard has been redrafted using the corresponding International Standards on Auditing as the basis.

The clarified Risk Assessment Standards, available at tinyurl.com/yddctqr, represent the redrafting of SAS nos. 106–110. They are:

 

  • Clarified SAS, Audit Evidence (Redrafted);
  • Clarified SAS, Materiality in Planning and Performing an Audit;
  • Clarified SAS, Evaluation of Misstatements Identified During the Audit;
  • Clarified SAS, Planning an Audit;
  • Clarified SAS, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement (Redrafted); and
  • Clarified SAS, Performing Audit Procedures in Response to Assessed Risks and Evaluating the Audit Evidence Obtained (Redrafted).

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The SASs are effective for audits of financial statements for periods beginning on or after Dec. 15, 2010. The effective date is provisional but will not be earlier.

The following exposure drafts are open for comment and contain details on proposed changes to the current standards:

 

  • Consideration of Omitted Procedures After the Report Release Date, which would supersede AU section 390, Consideration of Omitted Procedures After the Report Date, in AICPA Professional Standards. The comment period ends May 31.
  • Consistency of Financial Statements, which would supersede AU section 420, Consistency of Application of Generally Accepted Accounting Principles, in AICPA Professional Standards. The comment period ends May 19.
  • Reports on Application of Requirements of an Applicable Financial Reporting Framework, which would supersede AU section 625, Reports on the Application of Accounting Principles, in AICPA Professional Standards. The comment period ends May 17.
  • Analytical Procedures, which would supersede AU section 329, Analytical Procedures, in AICPA Professional Standards. The comment period ends May 3.