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