Overview

Recent feedback from peer reviewers and regulators has emphasized the importance of performing an effective risk assessment to identify and evaluate the risk of material misstatement in a financial statement audit. Risk assessment procedures include obtaining an understanding of the entity, performing preliminary analytical procedures, making fraud inquiries, evaluating the design and implementation of internal controls, and determining how much reliance an auditor will place on those controls. The results of the risk assessment process provide the auditor with the information needed to create an audit strategy and an audit plan. In October 2021 the Auditing Standards Board issued SAS 145 which amends the current risk assessment guidance and makes certain changes to other standards. The amendments clarify confusion that the AICPA believes auditors experienced under the existing standard and also conforms, for the most part, to the IAASB standard on the same topic. SAS 145 is effective for December 31, 2023 audits. Early implementation is permitted. This course will focus on how to perform the risk assessment process under the new standard providing participants with a summary of the changes to existing guidance. The course will also touch on performing a risk assessment in a virtual environment. Finally, the course will discuss linking the results of the risk assessment to further testing (internal control and substantive testing) and procedures performed in concluding on the evidence obtained.

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Learning Objectives