Just when you thought the economy was looking up, out peeks the PCAOB with a friendly reminder to the auditors out there that current economic conditions warrant a tad more due care than usual.
Kids, allow us to introduce you to Staff Audit Practice Alert No. 9.
The Public Company Accounting Oversight Board today published a Staff Audit Practice Alert to assist auditors in identifying matters related to the current economic environment that might affect the risk of material misstatement in financial statements and, therefore, require additional audit attention.
“Today’s volatile economic environment may affect companies’ operations and financial reporting, which has implications for audits,” said PCAOB Chairman James R. Doty. “The alert reminds auditors of their responsibilities under these conditions.”
Staff Audit Practice Alert No. 9: Assessing and Responding to Risk in the Current Economic Environment, updates Staff Audit Practice Alert No. 3, which was issued in December 2008, in light of current global economic conditions and recent enhancements to PCAOB standards.
Many of the matters discussed in Practice Alert No. 3, Audit Considerations in the Current Economic Environment — including fair value measurements, accounting estimates, going concern, and financial statement disclosures — continue to be critical in audits of 2011 financial statements. Certain of the PCAOB standards referenced in that alert regarding assessment of, and response to, risk, however, were superseded in 2010 with the Board’s adoption of eight new risk assessment standards (Auditing Standard Nos. 8-15).
“This practice alert discusses issues posed by the current economic situation and highlights certain requirements in the new risk assessment standards. Auditors should be alert to the new requirements contained in the risk assessment standards and how those requirements relate to audits performed in the current economic climate,” said Martin F. Baumann, PCAOB Chief Auditor and Director of Professional Standards.
We know you guys cannot wait to read this one, so by all means, knock yourselves out.
If you’re too busy to take the three minutes to read it, I’ll sum it up thusly: we’re doomed, so maybe SALY isn’t such a good idea after all.
So glad we’re all clear on that. Now, back to the JIT for all of you…