There can be last minute changes in plans at any time during the audit process and auditors need to be evaluating the risks in an engagement. According to The Journal of Accountancy, “A robust risk assessment is the key to creating an audit plan that guides the direction and procedures performed during the audit, prompting practitioners to spend their time in the right areas in the engagement.”
“In recognition of the foundational role of risk assessments in the pursuit of quality in engagements, the ASB in October issued Statement on Auditing Standards (SAS) No. 145, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement (see the sidebar “New Risk Assessment Standard Has Focus on Clarity”). The new standard is designed to address an area that the peer review program has identified as challenging for auditors and has been a focus of the AICPA’s Enhancing Audit Quality initiative.”
