Monday, February 13th, 2023
Risk Assessment Guide
“Don’t be fearful of risks. Understand them, and manage and minimize them to an acceptable level.” – Naved Abdali
Here is some information I received from the AICPA about risk assessment in a financial statement audit:
The AICPA has published a new audit guide, Risk Assessment in a Financial Statement Audit. The authoritative guide will help auditors implement Statement on Auditing Standards No. 145, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement, which takes effect for audits of financial statements for periods ending on or after Dec. 15, 2023, with early application permitted. SAS No. 145 implements several changes to the risk assessment process, including:
- A revised definition of significant risk
- A new requirement to assess control risk at the maximum level such that, if the auditor does not plan to test the operating effectiveness of controls, the assessment of the risk of material misstatement is the same as the assessment of inherent risk
- Revised requirements relating to audit documentation
- New guidance on scaling the risk assessment process.
The guide is available in e-book format.
- "Risk Management lets you apprecite the risk while you let somone else shoulder all the worry."
