Assessing and Responding to Audit Risk In a Financial Statement Audit – AICPA Audit Guide

Notice to Readers

This AICPA Audit Guide has been developed under the supervision of the AICPA Risk Assessment Audit Guide Task Force. The purpose of the guide is to help auditors fulfill their responsibilities for assessing risk in a financial statement audit that is performed in accordance with generally accepted auditing standards as established by the AICPA Auditing Standards Board (ASB) (United States). Generally accepted auditing standards established by the ASB are applicable to audits of nonissuers. Nonissuers are entities other than issuers, as defined by the Sarbanes-Oxley Act, or other entities that are required to be audited by a registered public accounting firm as prescribed by the rules of the Securities and Exchange Commission.

Pursuant to AU section 150, Generally Accepted Auditing Standards (AICPA, Professional Standards, vol. 1), interpretive publications consist of auditing interpretations of the Statements on Auditing Standards (SASs), appendixes to the SASs, auditing guidance included in AICPA Audit and Accounting Guides, and AICPA Auditing Statements of Position. Interpretive publications are not auditing standards. Interpretive publications are recommendations on the application of SASs in specific circumstances, including engagements for entities in specialized industries. An interpretive publication is issued under the authority of the ASB after all ASB members have been provided an opportunity to consider and comment on whether the proposed interpretive publication is consistent with the SASs. The members of the ASB have found this guide to be consistent with existing SASs.

The auditor should be aware of and consider interpretive publications applicable to his or her audit. If an auditor does not apply the auditing guidance included in an applicable interpretive publication, the auditor should be prepared to explain how he or she complied with the SAS provisions addressed by such auditing guidance.

This AICPA Audit Guide, which also contains attestation guidance, is an interpretive publication pursuant to AT section 50, SSAE Hierarchy (AICPA, Professional Standards, vol. 1). Interpretive publications include recommendations on the application of Statements on Standards for Attestation Engagements (SSAEs) in specific circumstances, including engagements for entities in specialized industries. Interpretive publications are issued under the authority of the ASB. The members of the ASB have found this guide to be consistent with existing SSAEs.

A practitioner should be aware of and consider interpretive publications applicable to his or her attestation engagement. If the practitioner does not apply the guidance included in an applicable AICPA Audit and Accounting Guide, the practitioner should be prepared to explain how he or she complied with the SSAE provisions addressed by such guidance.

012459