PCAOB Proposes Seven New Risk Assessment Standards

The Public Company Accounting Oversight Board (PCAOB) has decided to propose seven new auditing standards related to the auditor's assessment of and responses to risk. The proposed standards would realign the existing subject matter of several PCAOB interim standards into a topical framework that is common with the recently-clarified risk assessment standards of the International Auditing and Assurance Standards Board (IAASB).
 The proposed standards are also intended to:

• Enhance the integration of the audit of the financial statements with the audit of internal control over financial reporting
• Integrate the auditor's responsibilities for considering fraud throughout the audit process
• Reduce differences with IAASB standards while making changes that are necessary in the PCAOB's view for audits of issuers

The deadline for comments on the proposed standards, which are listed below, is February 18, 2009.

• Audit Risk in an Audit of Financial Statements
• Audit Planning and Supervision
• Identifying and Assessing Risks of Material Misstatement
• The Auditor's Responses to the Risks of Material Misstatement
• Evaluating Audit Results
• Consideration of Materiality in Planning and Performing an Audit
• Audit Evidence

The proposed standards along with a press release further describing the proposals are available on the PCAOB's website:
• PCAOB press release: http://www.pcaob.org/News_and_Events/News/2008/10-21.aspx
• Proposed Standards: http://www.pcaob.org/Rules/Docket_026/2008-10-21_Release_No_2008-006.pdf