Product Image

AICPA Audit Risk Assessment Tool and Guide

Publisher: AICPA
Availability: Varies by Format (See Below)
See Below To Add To Cart
View Online Catalog
Divider
Print This Page
Divider
Available Formats:  Online Subscription | eBook | Paperback | See All

View an introduction to the Audit Risk Assessment Tool by Chuck Landes

The Risk Assessment Standards establish standards and provide guidance concerning the auditor’s assessment of the risks of material misstatement in a financial statement audit and the design and performance of audit procedures whose nature, timing, and extent are responsive to the assessed risks

So what exactly does that mean?  In plain English, this means the audit engagement team needs to understand where, within the client’s accounting system and resulting financial statements, are there the highest risks of material misstatements (RMM); and where there is high RMM, the auditor typically needs to do more work in that area, and specifically needs to tailor his or her audit program to be responsive to RMM. 

The AICPA has developed this Audit Risk Assessment Tool to aid the more experienced auditor to think through risks of material misstatements for the purpose of identifying significant risks.  Significant risks are those risks of material misstatement, whether by error or fraud, that require special audit consideration.  In other words, this tool helps experienced auditors identify those high risk areas so that audit programs can be appropriately tailored.

This new tool is designed to help auditors work smarter and get to the important decisions regarding significant risks by taking a top down approach.  It can be used in lieu of cumbersome checklists that are commonly filled out by lower level staff and attempt to identify risks of material misstatements from the bottom up.  This tool can be used in place of voluminous risk assessment checklists in many commonly used audit methodologies. This tool is recommended for use on lower complexity engagements that are generally smaller in size and have less complex auditing and accounting issues.

The tool, which is accessible online, includes access to the entire AICPA Audit Guide, Assessing and Responding to Audit Risk in a Financial Statement Audit, and facilitates integration of AICPA guidance, through an Online Professional Library Subscription including:

    • Industry Audit and Accounting Guides
    • Industry Audit Risk Alerts

Auditors continue to struggle with effective and efficient execution of the Risk Assessment Standards. Common deficiencies as noted by peer reviewers include an over-reliance on checklists and inadequate documentation of audit risk assessment, including linkage of audit procedures to the risks they are designed to address. This tool is intended to work with any audit methodology and may be used for any audit; however, efficiency gains using this tool will probably be most notable with smaller audit clients. The utilization of this tool as a supplement to a firm’s existing planning module is designed to improve efficiencies and thus may reduce write-offs in this period of killer fee competition.



Find out what other CPAs are saying about the Audit Risk Assessment Tool!

“An elegant device that facilitates compliance with the standards”
– W. Douglas Logan, CPA, PC

“I was able to complete the risk assessment process faster compared to (a checklist method)…by identifying the significant areas/risks, we were able to focus on those areas and tailor the audit programs accordingly.”
- Sole Practitioner

“This process condenses the risk assessment down to just what you need to perform the risk assessment. The steps to get to the audit program generation were reduced and I think you end up with a better and more complete product at that point. I think it makes your planning process better.”
- Partner from CPA firm with 18 professionals

“I think time was the biggest efficiency (gained by using the ARA Tool). The support and guidance made the process of assessing risk quicker and clearer.”
– Audit Senior Manager from CPA firm with 88 professionals

“It would be beneficial to use this streamlined tool on a smaller entity where our current forms may be more inefficient.”
- Audit Supervisor from CPA firm with 400 professionals

Disclaimer

This Audit Risk Assessment Tool is designed to provide illustrative information with respect to the subject matter covered and is recommended for use on audit engagements that are generally smaller in size and have less complex auditing and accounting issues. It is designed to help identify risks, including significant risks, and document the planned response to those risks. The Audit Risk Assessment Tool should be used as a supplement to a firm’s existing planning module whether in a firm-based or commercially provided methodology. The Audit Risk Assessment Tool is not a complete planning module.

The AICPA recommends the Audit Risk Assessment Tool be completed by audit professionals with substantial accounting, auditing and specific industry experience and knowledge. For a firm to be successful in improving audit quality and efficiencies, it is recommended that a 5+ years experienced auditor completes the Audit Risk Assessment Tool or the engagement team member with the most knowledge of the industry and client (often Partner in small/medium firms) provides insight to whomever is completing the ARA Tool. The AICPA recommends this should not be delegated to lower-level staff and just reviewed – it should be completed under the direction of the experienced auditor (if you delegate to inexperienced auditor you will be at risk for less effectiveness and efficiencies because the tool is intended to be completed by an experienced auditor).

The Audit Risk Assessment Tool does not establish standards or preferred practices and is not a substitute for the original authoritative auditing guidance. In applying the auditing guidance included in this Audit Risk Assessment Tool, the auditor should, using professional judgment, assess the relevance and appropriateness of such guidance to the circumstances of the audit. This document has not been approved, disapproved, or otherwise acted on by a senior committee of the AICPA. It is provided with the understanding that the staff and publisher are not engaged in rendering legal, accounting, or other professional service. All such information is provided without warranty of any kind.

Online Subscription > AICPA Online Professional Library. Your subscription includes content updates and unlimited online access for 1 year. AICPA Online Professional Library - your source for the latest guidance, information, and standards on a variety of accounting & auditing, industry-specific, and practice management topics. Subscribe to the product, bundle, or library that best meets your organization's needs. Click here for more information.

IMPORTANT: Please read the Terms of Use tab prior to purchasing the tool.

AICPA Audit Risk Assessment Tool and Guide
Online Subscription ,
Product# WRA-XX
Availability: Online Access 1 Year
For registered users only
Regular:$123.75
AICPA Member:$99.00
Your Price:$123.75
To receive your AICPA member discount, Sign In now, or Register using your AICPA membership number.