The US Public Company Accounting Oversight
Board (PCAOB) has adopted a suite of eight auditing standards
related to the auditor’s assessment of risk during an audit.
The suite of risk assessment standards aim to
enhance the effectiveness of the auditor’s assessment of, and
response to, the risks of material misstatement in the financial
statements.
The new standards, initially proposed in
October 2008, address audit procedures performed throughout the
audit, from the initial planning stages through to the evaluation
of the audit results.
“These new standards are a significant step in
promoting sophisticated risk assessment in audits and minimising
the risk that the auditor will fail to detect material
misstatements,” PCAOB acting chairman Daniel Goelzer said.
“Identifying risks and properly planning and
performing the audit to address those risks, is essential to
promoting investor confidence in audited financial statements.”
The standards, which are subject to approval
by the US Securities and Exchange Commission, will become effective
for audits of fiscal periods beginning on or after 15 December
2010.
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