The US Public Company Accounting Oversight
Board (PCAOB) has issued Staff Audit Practice Alert No. 5: Auditor
Considerations Regarding Significant Unusual Transactions.

The alert provides guidance to auditors on how
to assess and respond to the risk of material misstatements
occurring due to error or fraud posed by significant unusual
transactions. Significant unusual transactions outside the normal
course of business may provide opportunities for companies to
commit fraud.

The alert provides advice on current
requirements from PCAOB auditing standards regarding significant
unusual transactions, including:

  • Identifying and assessing risks of material misstatement;
  • Responding to risks of material misstatement;
  • Consulting others;
  • Evaluating financial statement presentation and
  • Communicating with audit committees; and,
  • Reviewing interim financial information.

Staff Audit Practice Alert No. 5 complements
Staff Audit Practice Alert No. 3: Audit Considerations in the
Current Economic Environment.