Risks to watch during 2015 audit cycle

Professional skepticism and ICFR are among the topics of scrutiny.

Professional skepticism and internal control over financial reporting are two key areas for auditors that have attracted the focus of regulators in recent years.

These areas are among those addressed in one of two risk alerts published by the Center for Audit Quality (CAQ), which is affiliated with the AICPA.

In Select Auditing Considerations for the 2015 Audit Cycle, the CAQ identifies and discusses some of the areas of significant judgment and complexity for firms. Many of these areas also are included in a PCAOB Staff Inspection Brief that outlined three key areas of focus for the board's inspectors.

The CAQ also has issued a companion alert, Select Considerations for the 2015 Audit Cycle for Brokers and Dealers, in light of another recent PCAOB Staff Inspection Brief.

The first risk alert covers the following areas and offers the following topics:

  • Professional skepticism.
  • Internal control over financial reporting (ICFR).
  • Risk assessment and audit planning.
  • Supervision of other auditors and multi-location audit engagements.
  • Testing issuer-prepared data and reports.
  • Cybersecurity.
  • Revenue recognition.
  • Auditing accounting estimates, including fair value measurements.
  • Related parties and significant unusual transactions.

The CAQ member alerts highlight certain areas for consideration but are not intended to be relied on as definitive or all-inclusive, and should be read in conjunction with the applicable rules, standards, and guidance in their entirety, according to the CAQ.

SPONSORED REPORT

Tax reform complicates year-end tax planning

Get your clients ready for tax season with these year-end tax planning strategies, which address how to make the most of recent tax law changes, such as the new deduction for qualified business income and the cap on the deductibility of state and local taxes.

VIDEO

What RPA is and how it works

Robotic process automation is like an Excel macro that can work on multiple applications, says Danielle Supkis Cheek, CPA. RPA can complete routine, repetitive tasks such as data entry, freeing up employee time from lower-level chores.