Audit Risk Assessment Audits of Non-Issuers (Portfolio 5409)

Description

Bloomberg Tax Portfolio 5409, Audit Risk Assessment in Audits of Non-Issuers (Accounting Policy and Practice Series), analyzes the standards to which auditors must adhere in planning and performing audits to obtain sufficient appropriate audit evidence to express an opinion on an entity’s financial statements.

The AICPA’s auditing standards provide guidance concerning the auditor’s assessment of the risks of material misstatement (whether caused by error or fraud) in a financial statement audit, and the design and performance of audit procedures whose nature, timing, and extent are responsive to the assessed risks. Additionally, the standards provide guidance on planning and supervision, the nature of audit evidence, and evaluating whether the audit evidence obtained affords a reasonable basis for an opinion regarding the financial statements under audit.

The primary objective of the standards is to enhance auditors’ application of the audit risk model in practice by specifying, among other things:

•  More in-depth understanding of the entity and its environment, including its internal control, to identify the risks of material misstatement in the financial statements and what the entity is doing to mitigate them.
•  More rigorous assessment of the risks of material misstatement of the financial statements based on that understanding.
•  Improved linkage between the assessed risks and the nature, timing, and extent of audit procedures performed in response to those risks.

This Portfolio focuses on the general approach to conducting audits responsive to assessed risks. Specifically, it focuses on the key issues identified in the risk assessment standards. Since the focus of this Portfolio is on the audit process, this Portfolio does not cover specific audit procedures. It also does not cover standards related to audit reports or other auditor communications. Auditors are reminded that professional standards provide detailed guidance in these areas that must be followed in the performance of an audit.

The Portfolio may be cited as Bloomberg Tax Portfolio 5409, Madray, Benedict & Brown. Audit Risk Assessment in Audits of Non-Issuers (Accounting Policy and Practice Series).

Table of Contents

I. Introduction
II. Foundations of Audit Committees
III. Fundamentals of Audit Committees
IV. Oversight Functions of the Audit Committee
VI. Miscellaneous Issues Concerning Audit Committees
VII. Conclusion