AICPA Auditing Standards Board approves to ballot for exposure suite of clarified risk assessment standards.

At a recent meeting, the AICPA's Auditing Standards Board voted to approve for exposure certain risk assessment standards rewritten as part of its Clarity Project. The exposure drafts are expected to be released in Jan. 2009. In addition, the Public Company Accounting Board on Oct. 21 released for exposure its risk assessment standards, with comments due Feb. 18. AICPA members may wish to review the ASB's proposed clarified risk assessment standards and comment on both PCAOB and ASB exposure drafts simultaneously.

The PCAOB risk assessment standards are substantially consistent with the ASB's risk assessment standards. Any differences are due to the PCAOB integrating fraud risk procedures into its standards and addressing audits of internal control and audits of financial statements.

Issued in 2006, the risk assessment standards now in effect emphasize the link among understanding the entity, assessing risks and the design of further audit procedures. Additionally, those SASs establish standards and 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 clarified risk assessment standards being exposed in Jan. are:

1. Proposed SAS 106, Audit Evidence (Redrafted): Supersedes SAS No. 106, Audit Evidence

2. Proposed SAS 107, Materiality in Planning and Performing...