AuditandAttestStandardsUpdate.ppt

Audit and Attest Standards Update Ensuring Integrity: 4th Annual Audit Conference Harold L. Monk, Jr. CPA, CFE Davis, Monk Company Recent Auditing Standards Board Activities Clarity Project Clarity Background Discussion paper issued March 2007 ASB considered comments received and approved direction forward August 2007 Goals: Address concerns over length and complexity of standards Make standards easier to read, understand and implement Will lead to enhancements in audit quality Clarity Drafting Conventions Introduction Objective Definitions Terms used in the SAS are defined Establish separate glossary of terms Requirements and Application Material Objective Create objectives for each standard Provide a framework for the application of professional judgment Outcome based goal Difficult to achieve the overall objective of the audit if individual objectives are not achieved Requirements and Application Material Application and other explanatory material presented in a separate section that follows the requirements Application and other explanatory material paragraphs numbered using an A prefix Cross-referencing between requirements and related application material Clarity and Convergence Convergence with ISAs Removal of unnecessary differences Supplemental materials with EDs Mapping of the requirements and guidance contained within extant AU section to the proposed SAS; and Schedule of proposed changes in requirements and explanatory material as a result of redrafting. Schedule of detailed changes in language between the proposed SAS and the ISA. Exhibit of substantive differences with ISA Audit and Attest UpdateClarity Project Once finalized, they’ll be made available to practitioners. However, the standards will not become effective piecemeal. With limited exceptions, all “clarified standards” will become effective at the same time Most likely 2011 Implementation Issues Of Risk Assessment Standards QA—Use of Walkthroughs Question—How often do walk