| During 2005 and 2006, the American
| |
| | SAS No. 106 - Audit Evidence
|
| Institute of Certified Public Accountants
| |
| | SAS No. 107 - Audit Risk and Materiality
|
| issued several new standards to improve
| |
| | in Conducting and Audit
|
| and clarify auditing standards in
| |
| | SAS No. 108 - Planning and Supervision
|
| general.
| |
| | SAS No. 109 - Understanding the Entity
|
| There were two statements that were
| |
| | and Its Environment and Assessing the
|
| issued and became effective upon
| |
| | Risks of Material Misstatement
|
| issuance:
| |
| | SAS No. 110 - Performing Audit Procedures
|
| Statement on Auditing Standards (SAS)
| |
| | in Response to Assessed Risks and
|
| Numbers 102 and 103.
| |
| | Evaluating the Audit Evidence Obtained
|
| SAS No.102, Defining Professional
| |
| | SAS No. 111- Amendment to SAS No. 39 -
|
| Requirements in Statement on Auditing
| |
| | Audit Sampling
|
| Standards, clarifies steps in auditing
| |
| | A greater understanding of the entity is
|
| standards that are "unconditional
| |
| | required. Auditors are no longer able to
|
| requirements" defined by works such as
| |
| | assess control risk at maximum without a
|
| "must" and "is required to"; and steps
| |
| | basis for that determination.
|
| that are "presumptively mandatory
| |
| | There are several steps auditors must
|
| requirements" defined by words such as
| |
| | take in applying the Risk Assessment
|
| "should".
| |
| | Standards.
|
| SAS No. 103, Audit Documentation,
| |
| | Gathering Information - The auditors must
|
| provides guidance on audit documentation
| |
| | begin with gathering information about
|
| as an essential element of audit quality.
| |
| | the entity and its environment, including
|
| This standard also gives guidance on the
| |
| | its internal control. Information
|
| date of the audit report which cannot be
| |
| | gathering should include at minimum
|
| earlier than the date on which the
| |
| | information obtained from external
|
| auditor has obtained sufficient
| |
| | factors; information about the nature of
|
| appropriate audit evidence to support the
| |
| | the client; information in connection
|
| opinion. As a result, the audit report
| |
| | with the objectives and strategies and
|
| date will need to be close to the date
| |
| | related business risks of the client;
|
| the reports are released
| |
| | information regarding the client's
|
| The American Institute of Certified
| |
| | measurement parameters including a review
|
| Public Accountants also issued the Risk
| |
| | of the client's financial performance;
|
| Assessment standard in March 2006. The
| |
| | and information in connection with the
|
| project originated as a joint project
| |
| | client's internal controls.
|
| with SAS No. 99, Consideration of Fraud
| |
| | Understand the Entity - The auditor must
|
| in a Financial Statement Audit. These
| |
| | also understand the entity and its
|
| standards were issued because the
| |
| | environment, including its internal
|
| Accounting Standards Board believes that
| |
| | control. The auditor must anticipate and
|
| they will strengthen auditing standards
| |
| | evaluate what could go wrong, and be able
|
| and provide a more in depth understanding
| |
| | to synthesize the information gathered to
|
| of the entity and its environment, a more
| |
| | determine how it might affect the
|
| rigorous assessment of material
| |
| | financial statements. The auditor must
|
| misstatements and improved linkage
| |
| | also evaluate the design of the client's
|
| between assessed risk and the nature,
| |
| | controls and determine if those controls
|
| timing and extent of audit procedures
| |
| | have been implemented (which is different
|
| performed.
| |
| | than test of controls). In evaluating
|
| The following standards are in the suite
| |
| | whether controls have been implemented,
|
| of SASs issued in connection with the
| |
| | the auditor should determine if there is
|
| Risk Assessment standards:
| |
| | an awareness of the existence of the
|
| SAS No. 104 - Amendment to SAS No.1-
| |
| | procedure in question and if the staff
|
| Codification of Auditing Standards and
| |
| | implementing the control have a working
|
| Procedures
| |
| | knowledge of how the procedure should be
|
| SAS No. 105 - Amendment to SAS No.95 -
| |
| | performed.
|
| Generally Accepted Auditing Standards
| |
| |
|
