During this Knowledge Group live CPE/CLE webcast (1.5-2.0 Credits), participants will have an overview of how to interpret and implement the new risk assessment standards, including documentation guidance and suggestions for effectiveness. By joining this webcast, you will learn how to link internal control documentation to risk assessment and responsive audit procedures. Enroll by clicking the “Register” button below. Advanced registration is recommended as space is limited for this class.
Course Level: Intermediate
Prerequisite: None
Method Of Presentation: Group-Based-Internet
Developer: The Knowledge Group, LLC
Recommended CLE/CPE Hours: 2.0
Important Note: Your State Bar or Accounting Board will make the final determination with respect to continuing education credit. If you are applying for CLE credit in Texas you must register 20 days before the event date or you will not be able to obtain CLE credit.
Advance Preparation: Print and review course materials
Course Code: 103955
Richard H. Gesseck
CPA, Partner
Jan Herringer
Director
Jeffrey F. Robertson
Special Counsel
Phil D. Wedemeyer
Partner, National Professional Standards Group
D. Keith Wilson
Deputy Chief Auditor
D. Keith Wilson, Deputy Chief Auditor, Public Company Accounting Oversight Board
- Overview of the Risk Assessment Standards
- Enhancements to Auditors' Risk Assessments and Responses
- Highlights of Individual Standards
Jan Herringer, Director, BDO USA LLP
- Consideration of Fraud within the Risk Standards
- Integration of Auditing Standard No. 5 Considerations
- Multi-location Audit Guidance
Jeffrey F. Robertson , Special Counsel, Schulte Roth & Zabel LLP
- Enforcement Risks
What are the risks of inconsistent interpretation and application of new standards?
How will documentation requirements of new audit standards be used by regulators? Roadmap for second-guessing regulators? More than just a checklist?
- Materiality standard
Significance of adopting legal standard?
Comparison with SAB 99
Phil D. Wedemeyer, Partner, National Professional Standards Group, Marcum LLP
- The ultimate effect of these standards, like all others, will depend on the approach taken
by PCAOB inspections,in particular, the level and type of documentation required to demonstrate
the application of an audit process that complies with PCAOB standards.
- Practitioners should consider how to deal with the inter-relationship between risk
assessment standards and PCAOB standards regarding procedures to address
identified risks (e.g., the proposed standard on audit confirmations). That is-
- Risk assessments should be developed and documented in a manner that, if possible,
appropriately satisfies “requirements to consider” or that overcome presumptively mandatory
procedures contained in other standards
- Audit methodologies should be reviewed to see that they maximize use of the results of risk
assessment in demonstrating compliance with standards related to addressing identified
audit risks
- AS 10 imposes a requirement to assess engagement supervisory risk and to tailor the
supervisory process to address those risks ( Para. 6, AS10- Appendix 3). Although this is not
a newnotion, it may involve additional documentation and revision of methodology
to demonstrate compliance
- AS 11 implies a notion that qualitative factors should be considered in planning materiality. This is
not a new notion but has not been formally applied in the past.
- The application of the broad definition of materiality contained in AS11 (Para. 2) will require
substantial development since it attempts to applyan ex post concept to an a priori judgment.
Accounting framework will give some of the answer and is acknowledged in the standard.
- In the past, planning materiality has been determined by reference to a specific
single quantitative benchmark. The concept of “quantitative and qualitative”
considerations implies that this approach must be supplemented.
- The example in Para. 7 of AS11 implies that qualitative factors might reduce the TM
for a specific account or assertion. What about an increase? How will this work
in practice?
- What about the break-even income situation in determining total materiality?
- What about the minimum level of precision inherent in audit procedures?
- The notion of different TM for different accounts/assertions will require development.
- Effect of prior error rates on development Tolerable Misstatement AS 11- Para.9. Many
firms do not modify TM for higher expected error rates.
- AS 12 may require evaluating methodologies to see that they provide a basis for compliance
with Para. 11-
- Para. 11 lists procedures that should be considered for performance in
understanding the company-
- public information, earnings calls and transcripts, trading activity in the stock
- understanding of compensation arrangements.
- As a result, there needs to be thought around how to use this information in risk Assessment.
In particular, all companies have incentive plans that tie comp to performance. Are there
practical approaches to spotting those that are higher risk?
Richard H. Gesseck, CPA, Partner, J.H. COHN LLP
- Responding to the risk of material misstatement (AS 13)
- Evaluating results (AS 14)
- Obtaining appropriate evidence (AS 15)
- Auditors and Accounting Professionals of Smaller Reporting Companies (SRC)
- Non-Accelerated Filers
- Non-Complex Accelerated Filers
This is a must attend event for everyone to hear the latest updates on PCAOB’s Risk Assessment Standards
- Detailed guidance explained by the most qualified key leaders & experts
- Hear directly from key regulators & thought leaders
- Interact directly with panel during Q&A