PCAOB Releases Final Audit Standard Materials
The Public Company Accounting Oversight Board (PCAOB) has made public eight audit standard materials, AS 8 to 15, approved by the Securities and Exchange Commission on December 23 last year.
The publication of audit standard materials came nearly a month after the SEC released an order approving PCAOB’s proposed rules on auditing standards related to the auditor’s risk assessment and related amendments to PCAOB standards.
PCAOB initially filed with the SEC on September 15, 2010 the eight audit standards which would eventually supersede six of the board’s interim auditing standards. The audit standards became effective December 15, 2010.
Audit standard 8, Audit Risk, tackles concerns in audit risk to be considered by auditors when assessing financial statements as part of an integrated audit or audit of the financials alone. It encourages auditors to reduce the risk to a relatively low level when conducting the audit.
Audit standard 9 sets the requirements for planning an audit effectively while AS 10 lays out how the audit engagement is to be supervised so conclusions are justifiable.
The 11th audit standard establishes requirements regarding the auditors’ consideration of materiality in planning and performing an audit.
Audit standard 12 discusses how auditors could identify and assess risks of material misstatement in financial disclosures while audit standard 13 equips auditors in responding to the risks associated with misstatements in financial reports through appropriate overall audit responses and audit procedures.
Finally, audit standard 14 requires auditors to assess the outcome of their work so as to establish sufficiency of audit evidence before making an opinion in the auditor’s report while audit standard 15 defines what qualifies for audit evidence.